Thaw in govt-Cong GST standoff

Prime Minister Narendra Modi on Friday evening held discussions with Congress president Sonia Gandhi and former prime minister Manmohan Singh, in a first such initiative that was seen as an indication of thaw in the standoff over Goods and Services Tax (GST) Bill in Parliament.

That the ice has been broken between the NDA government and the Congress was evident when AICC spokesman Anand Sharma described the 45-minute meeting as “constructive” and the Opposition party would hold “internal discussions” on the issue.

The Modi government has been facing flak for the slow pace of economic reforms and the delay in roll-out of the GST. Both Modi and Jaitley have, on several occasions, asserted that they were keen to implement the GST bill from April 1 next year, a deadline that appears to have forced them to make peace with the Opposition.

Manmohan Singh listed out Congress’s concerns over the bill that has been hanging fire in Parliament since May.

Singh told Modi that the Congress wanted abolition of 1 per cent additional tax, a cap on GST rate at 18 per cent and creation of a separate dispute settlement mechanism.
The government has been maintaining that it would be difficult to mention the cap on the GST rate in the bill as it would require a constitutional amendment to alter it in the future.
On the additional one per cent tax, the government felt it was necessary to reimburse manufacturing states such as Tamil Nadu, Karnataka, Maharashtra and Gujarat.

It was agreed that the Congress and the Modi government would establish “fresh contact” after discussing the issue with their leaders.

Modi also directed Venkaiah Naidu to be in touch with Congress leaders in Parliament.