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FM calls Congress suggestions on GST ‘preposterous’

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Barely two days before the start of the winter session of Parliament, Finance Minister Arun Jaitley said the government was willing to reach out to the Congress over the goods and services tax ( GST) but counselled the party to reconsider some of its suggestions as they can “ damage” the new indirect taxation system.
Speaking at the annual day function of Assocham in New Delhi on Tuesday, Jaitley termed “preposterous” the Congress’ suggestion that tariff must be mentioned in the Constitution amendment Bill. “ It did not dawn on them when ( the then finance minister) PChidambaram accepted the Standing Committee recommendations,” Jaitley said, adding it would be “ extremely unfair” to the country “ if we try to impose in the name of political compromise, a GST with a defective architecture”.
“And when tariff rate has to be mentioned in the Constitution itself, ( then it) is a flawed architecture...
Because the GST with flawed architecture can actually damage the system much more than it can benefit,” he said, adding this wasn’t there in Pranab Mukherjee’s as well as Chidambaram’s Bill.
Finding fault with the dispute resolution mechanism suggested by the Congress, Jaitley said, “ Two suggestions have emerged. The first is to make the Centre one- fourth ( in the dispute resolution body). If the Centre becomes one- fourth, states become three- fourth (and they) can decide on India’s taxation policy. So, India as a union of state ceases to exist.” Referring to another Congress suggestion to create a forum where judges will decide these issues, Jaitley said taxation was one of the very few powers that Parliament has and the proposal would result in that power also shifting to courts in the world’s biggest democracy.
But, Jaitley’s concerns are unlikely to cut much ice with the Congress, with leaders saying these were “ bonafide concerns” and not political or partisan in any way. They reiterated that the Congress had never been opposed to GST but the government’s drafting of the Constitution amendment Bill diluted the essence and the objective that were envisaged with ushering in this landmark tax reform.
Business Standard, New Delhi, 25th Nov. 2015

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