New Delhi: Congress has decided to press for five changes in the Goods and Services Tax Bill, which the Centre proposes to roll out from April 2016. Sources in Congress said that the party will press for inclusion of tobacco and electricity under the GST regime, which are so far exempted. They also want that one per cent of tax, which has been imposed over and above GST to compensate the manufacturing states is removed.
The party feels that if that provision was implemented only states like Gujarat, Maharashtra and Tamil Nadu will benefit at the cost of other states. Besides it wants that the government should mention the compensation formulae in the bill.
"The compensation formulae should be specified. What is it. It has been left vague. The bill only says there will be a compensation formulae," a leader said.
Congress will also stress for restoring a dispute settlement provision in the bill, which it said, existed in the earlier bill introduced by UPA's Finance Minister P Chidambaram.
"It should be restored. The GST council cannot settle disputes. We should have some dispute settlement mechanism," the leader said.
Claiming that right now the GST rate is a "recipe for disaster", Congress said that it also wants that the bill should set a ceiling on GST rate.
"We want the Act to say that the GST rate shall not exceed 18 per cent. If we do not say that it could be anything," the leader said stressing that Congress wants GST to be a 'Good and Simple Tax' and not Goods and Service Tax.
The party took a conscious decision to make these five demands during a conference of Congress Chief Ministers here this month. Touted as the single biggest indirect tax reform since Independence, the GST will subsume various levies like excise duty, service tax, entry tax and octroi.
Congress, which described the GST as its "own baby" forced the government to refer the Constitutional Amendment Bill for rolling out of GST to a Select Committee of Rajya Sabha in last session of Parliament. The Lok Sabha has already cleared the Bill.
While AIADMK was the only party to have declared its opposition to the economic reform measure, the Congress was adamant that it should be sent to a Select Committee for examining the changes that were brought into it by the NDA dispensation.
The 21-member Select Committee headed by BJP MP Bhupender Yadav will be meeting next week to discuss the report. The panel has to give its report to Rajya Sabha by the last day of the first week of the Monsoon session.
States are pressing the Centre for compensating them fully for the loss of revenue in the first five years of GST replacing their taxes. The Centre has agreed to compensate states fully in the first three years and partially in fourth and fifth year.
On June 16, Chairman of the Empowered Committee of state FMs on Goods and Services Tax (GST) K M Mani submitted views of the states to the Rajya Sabha Select Committee which is scrutinising the Bill.
Mani was optimistic that the GST Bill "will go through". Gearing up to roll out GST from April 1, 2016, the Finance Ministry on June 17 set up two committees to suggest tax rates and look into IT preparedness for the new indirect tax regime.
Committee formed under the Finance Ministry's Chief Economic Advisor would "recommend possible tax rates under GST that would be consistent with the present level of revenue collection of Centre and states," a statement said. The panel is to submit its report in the second week of July after which the bill will be taken up in the Upper House for its passage in Monsoon session beginning July 21.
