Congress to oppose 28% GST rate in parliament

Business Standard By Amit Agnihotri & Agencies November 15, 2016. 00:37 IST

Congress spokesperson says, We are not against GST but we are concerned about the impact of the four-tier structure.

The Congress has hardened its position on the Goods and Services Tax (GST) Bill, saying it is opposed to the four-slab tax structure in which the top limit is 28 per cent.

The position is being taken ahead of the winter session of Parliament, which starts on Wednesday.

This month-long winter session, the government wants to pass two legislation pieces related to the main GST Bill, passed in the monsoon session. The passage of these Bills will ease rolling out of the GST from the target date of April 1, 2017. The government wants to push the two legislation pieces early in the session.

Congress spokesperson Randeep Surjewala said, “We will oppose the 28 per cent GST slab. Any rate over 18 per cent will push inflation and break the back of the common man. We are not against the GST but we are concerned about the impact of the four-tier structure. We had supported the GST for development, not to trouble people.”

Recently, the GST council, which has representatives from the states, had approved a four-trier tax structure (five, 12, 18, and 28 per cent).

Congress sources said a four-tier GST rate, coupled with wide gaps between the Centre and the states in terms of enabling software and hardware systems, was “unimplementable”.

The states and the Centre are set to hammer out the issue of jurisdiction over assessees under GST this week.

Kerala Finance Minister Thomas Issac said a vertical division of assessees for collection of taxes and audit would create problems for small taxpayers.

“Kerala, Bengal, Tamil Nadu, Bihar, Delhi, Odisha ... a majority of states want a combination of vertical and horizontal (dual-control structure). Below Rs 1.5-(crore turnover), states should tax; above Rs 1.5 crore, it can be vertical division,” Issac said.

The states have asked for control over 1.1 million service tax assesses while the Centre had proposed to do away states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore. This issue was settled in the first meeting of the GST Council.

Finance ministers of states will informally meet Finance Minister Arun Jaitley on November 20 to evolve a political consensus on the sticky issue ahead of the next meeting of the GST Council on November 24-25.

“We are very hopeful of GST implementation from April 1, 2017. By Tuesday we will share the model GST law with the states which has been redrafted after taking into account the comments of stakeholders,” Central Board of Excise and Customs (CBEC) Najib Shah said.

He said the compensation law would be shared with the states on November 16, detailing the procedure for making good revenue loss of states in the first five years of GST rollout.

The GST will subsume excise, service tax, VAT and other local levies and will help in smooth movement of goods and services across the country.

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