Decks clearing for GST Bill passage in RS

NEW DELHI: If parties supporting the current GST bill and those who had reservations, but have edged closer to supporting the legislation, are taken together, the longpending landmark tax reform has now more than two-thirds support needed for its passage in Rajya Sabha.

As things stand, around 163 MPs could support the bill, excluding 12 from AIADMK who had concerns but could reach a middle ground or would abstain, as opposed to 65 UPA MPs. The 10 Left MPs have not officially declared their support, but considerable progress has been achieved in narrowing differences with CPM, government sources said.

Tamil Nadu, with a strong manufacturing base, is worried about loss of revenue. But the sources are hopeful that given NDA’s cordial relations with CM J Jayalalithaa, AIADMK will at least abstain if it doesn’t back the bill.

The government is promising AIADMK that the compensation clause will address the issue. Odisha’s ruling BJD has had concerns over royalties for minerals but will support the bill.

Though Congress is fairly isolated, it has the numerical strength to disrupt the House, preventing passage of the legislation. As the bill is a constitutional amendment, a vote is required and the House must be in order. Any disruption will effectively stall the bill’s passage. The government hopes to persuade Congress to drop its insistence on writing an 18% rate into the amendment bill.

Even an abstention by AIADMK will work to the government’s advantage. With 163 MPs in support in a House with an effective strength (if AIADMK abstains) of 229, the GST has the backing of 71% members. As of now, the House has a strength of 241, with four vacancies. In fact, after the June 11 election, BJP will gain four, Congress will lose the same number, JD(U) will lose three, AIADMK will gain one and RJD will gain two seats.

However, the backing for the bill will only become stronger if the AIADMK finally decides to support the legislation. The Left indicated its support to the GST bill during recent meetings between Kerala CM Pinnarayi Vijayan and finance minister Arun Jaitley.

Jaitley has asked Congress to allow the “parliamentary process” to unfold in case it does not support the legislation and while this might be part of psychological warfare, it also refers to the voting process. So far, Congress has remained unmoved and relations between the parties have remained tense with the Agusta corruption case being the latest feud.

Congress wants the 18% rate written into the constitutional amendment bill but the government says tax rates are not written into legislation and this job be left to the GST council where states and Centre are represented.

Congress has also said BJP did not allow the GST bill to go through when it was in opposition with states where it is in office like Gujarat and MP opposing its provisions.