Regulators

Rajya Sabha panel approves GST with minor changes, several parties attach dissent notes

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NEW DELHI: Even though the Rajya Sabha Select Committee on the Goods and Services Tax (GST) gave its green signal today, the going will not be easy in view of the fact that the opposition – which is in a majority in the house – may ultimately have its way.

 

The Committee endorsed almost all the provisions and also agreed to demands of parties like the Trinamool Congress for a five-year compensation to states. 

 

Chaired by the Bharatiya Janata Party's Bhupender Yadav, changes were suggested in some clauses pertaining to compensation, and levy of one per cent additional tax by the states on inter-state supply of goods. 

 

The government plans to implement GST from April next year, which has been pending for several years with every Finance Minister making promises. The GST is expected to provide great relief as it will subsume within itself many other taxes being levied at present like excise, service tax, and local levies. 

 

The report placed in the House today contains dissent notes from Congress, AIADMK and Left parties, which have expressed their opposition to the GST Constitution Amendment Bill in the existing form. 

 

The GST Bill, which has already been approved by the Lok Sabha where the ruling party is in majority, will now be taken up by the Rajya Sabha for discussion. Being a Constitution Amendment Bill, it has to be approved by two-thirds of the members present and voting. 

 

The Committee has suggested that the provision in the bill that provided Centre "may" compensate states for a period up to five years for any revenue loss be substituted by a commitment for compensation for five years. 

 

In a clause relating to levy of one per cent additional tax by states, the committee suggested that the levy should only be on “all forms of supply made for a consideration.”

 

It, however, retained the representation of the Centre and States at the proposed level at one-third and two-third despite demand to reduce Centre's representation to one-fourth. 

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