Finance minister Arun Jaitley will chair the meeting of state finance ministers on Goods and Services Tax on Tuesday which is likely to discuss various vexed issues that is holding up the passage of the much-talked-about tax reform in the Rajya Sabha.
The meeting assumes significance as it takes place at a time when there are indications that the Congress may hardening its stance on the Bill after the National Heral case flared up over the weekend. The main opposition party has also got another stick to beat the BJP in the widespread Dalit unrest in Gujarat after public flogging of seven members from the community.
However, according to a report in the Business Standard, the meeting today will take up revoking the one percent additional tax in hands of the states, one of the demands of the main Opposition party the Congress.
"The removal of the one per cent additional tax on inter-state trading may come up for discussion at the empowered committee meeting," a government official has been quoted as saying in the BS report.
Jaitley has been engaged in back-channel negotiations with Congress leaders to get their support for the bill. The finance minister will discuss other proposed amendments to the GST legislation passed by the Lok Sabha at the meeting of the empowered committee of state finance ministers.
Earlier, a PTI report said the GST Bill will be listed for discussion in the Rajya Sabha after taking on board views of the states.
On Friday, while listing out government business for the week beginning 25 July Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi told the Rajya Sabha that the GST Bill will come up for discussion next week.
"(This is for) further consideration and passing of the Constitution 122nd Amendment Bill, 2014, as passed by the Lok Sabha and as reported by the Select Committee of the Rajya Sabha," he said in the Upper House.
The Congress, which originally mooted GST in 2009 to replace all indirect taxes, has been demanding that the overall rate be capped at 18 percent and scrapping of an additional 1 percent tax designed to compensate manufacturing states that fear losing out on revenue. It also wants an independent mechanism to resolve disputes between states over revenue sharing.
While Jaitley has indicated his openness in scrapping the 1 percent additional tax after a panel headed by Chief Economic Advisor Arvind Subramanian favoured it, the issue needs to be discussed with the manufacturing states.
In order to mobilise support from regional parties for the long-pending indirect tax reform, Jaitley met Bihar Chief Minister and JD(U) leader Nitish Kumar and courted senior leadership of Andhra Pradesh and Telangana over the weekend.
The government has agreed to a five-hour debate on the GST Bill in the Rajya Sabha in the current session.
However, there are indications that the Congress is hardening its stance on the Bill after the Enforcement Directorate that the Bill is unlikely to be passed in this session after the investigating agency booked former Haryana chief minister Bhupinder Singh Hooda in the National Herald case.
"Cooperation in the house for the interest of the country we are doing. But politically they are taking revenge," senior Congress leader Mallikarjun Kharge has been quoted as saying in a report on NDTV.
Interestingly, the smaller parties that have offered support for the Bill are also blaming the BJP for raking up the National Herald issue at a time when the Congress was coming round to a consensus.
"What was the need to lodge an FIR at this time? This could have happened two weeks later," a senior JDU leader has been quoted as saying in the NDTV report. The leader thinks this has been done deliberately and at the insistence of the PMO.
GST Bill intends to convert 29 states into a single market through a new indirect tax regime. It was earlier planned to be introduced from 1 April this year, but the deadline was missed as the Bill to roll it out remains in a limbo in the Opposition-dominated Rajya Sabha.
The Bill, which will help create a single national sales tax to replace several state and central levies, has already been approved by the Lok Sabha and is pending in the Upper House.