With 1% additional levy scrapped, government positive on getting GST through

New Delhi, Aug 2 (IANS) The much delayed bill to amend the constitution and introduce a Goods and Services Tax is scheduled to be moved by Finance Minister Arun Jaitley in the Rajya Sabha on Wednesday, with the government hoping it will sail through after the additional levy of 1 percent proposed earlier was scrapped.

The bill, technically called the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, will make provision for introduction of Goods and Services Tax in the Constitution.

The government on Tuesday appeared confident of getting the bill through the upper house, where it is in minority, saying it was positive that all parties will support the bill.

"There is a consensus among all parties regarding the importance and requirement for the GST bill. The bill is coming after much deliberation and we are positive about the outcome. We are confident all parties will come together to get the bill passed," said Parliamentary Affairs Minister H.N. Ananth Kumar.

A slew of amendments have been proposed in the existing bill, with a key one deleting Clause 18 that intended to compensate the manufacturing states with one per cent additional duty for a period of two years or more for revenue losses.

The additional levy was also among the main objections of the opposition Congress party, whose support is necessary for the bill's passage since the National Democratic Alliance government lacks a clear majority in the upper house of parliament.

Also Clause 19 dealing with compensation to states for a period of five years or more towards the losses they may suffer due to a shift to the new regime, has been made more specific. It now says parliament by law "shall" compensate states, as opposed to the word "may" that was used earlier.

Clause 12, which deals with dispute resolution between and among the Centre and states, and again was a bone of contention since the original bill left this to the GST Council has been reinforced, with the amendment calling for a standing mechanism to adjudicate disputes.

However, another Congress demand, to specify the GST rate in the statute, has not been accepted. Last week, West Bengal Finance Minister Amit Mitra chaired a GST panel meet in which all states agreed to keep the GST rate out of the bill.

On Tuesday, Congress MP Abhishek Manu Singhvi said the party would be in favour of passing the bill if there are no "obstacles".

"If there isn't any obstacle, the GST Bill will be approved tomorrow (Wednesday)," he told reporters outside the Parliament House, but did not elaborate what the "obstacles" could be.

Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury, meanwhile, said the bill that was coming on Wednesday was just to make a provision for introducing GST and they will wait for the GST bill, while Janata Dal-United leader Sharad Yadav came out in support of the bill.

The GST bill was introduced in the Lok Sabha on December 19, 2014, and was passed by the Lok Sabha five months later on May 6. It was then referred to a Select Committee of the Rajya Sabha which submitted its report on July 22.

These amendments will need to get the nod of the Lok Sabha again, following which at least 50 per cent of the states need to ratify the bill for it to become a law. This again could be a long-drawn process, since the states will have their own sets of issues and queries.

The new regime, termed as the most radical tax reform since Independence, seeks to subsume all central indirect taxes like excise duty, countervailing duty and service tax, as also the state levies like VAT, entry tax and luxury tax, to create a single, pan-India market.