Govt climbs down, willing to drop 1% tax

by Harish Gupta, National Editor, Lokmat Group

Harish Gupta

New Delhi, Dec 3

The government has signaled its willingness to climb down from the high horse on the GST bill and accept some of the suggestions given by the Congress. With Chief economic adviser Arvind Subramaniam holding prolonged discussions with Union finance minister Arun Jaitley after returning from the USA today, indications are that the government may accept Congress suggestion not to impose one per cent extra tax for the manufacturing states of Gujrat, Maharashtra, Tamil Nadu & Karnataka. The Centre will meet the revenue loss up to one per cent of these states after accepting the Congress demand.

Jaitely indicates Centre may accept a "Band rate" (18-20%) instead of 18% fixed at present; discuss other issues with Oppn

With regard to fixing a Cap on GST rate, the government has signaled that it is willing to discuss the issue.  Instead of a fixed tax rate, the government may accept a "Band rate" (18-20%) instead of 18% fixed at present.The third proposal relating to dispute redressal mechanism being entrusted to GST Council as proposed in the Bill, the government is ready to evolve an alternative mechanism.

Jaitley told journalists today that the government is striving hard to ensure the smooth passage of the GST Bill and will shortly discuss the same with the Congress leadership. But the problem is that the government's proposals are not ready formally as yet and neither Sonia Gandhi is in town. With both houses of Parliament functioning smoothly today after a week, the business is proceeding as per schedule. In fact, the Lok Sabha passed two bills today and the Rajya Sabha also took up one bill for the passage. Now the matter will come up for discussion sometime on Monday next.