Congress needs to revisit some GST demands: Arun Jaitley

NEW DELHI: Ahead of the winter session of Parliament, finance minister Arun Jaitley has said the government is willing to discuss the proposed goods and services tax ( GST) with opposition but Congress should revisit some of its demands as they can "damage" the system.

"We are reaching out to them, we are willing to discuss with them because some of these suggestions may not necessarily be in the larger interest of the GST structure," Jaitley said on Tuesday.

The government plans to roll out GST from April 1, 2016 and needs to get the constitutional amendment bill passed in the winter session of Parliament.

Delivering keynote address at the annual general meeting of industry body Assocham, the finance minister said those who stall reforms should realise that place of obsolete thinking is shrinking in the country.

Main opposition Congress has stalled the passage of the constitution amendment bill in the Rajya Sabha where the ruling NDA does not enjoy majority. The party has sought some changes, including capping of GST rate at 18% in the constitution amendment bill as also scrapping of the 1 per cent tax on inter-state trade.

The constitution amendment bill proposes to create a GST council that will set the rates of the new levy.

Freezing or capping the rates in the constitution amendment bill may not be an acceptable proposition to states as it would be seen as infringing on their fiscal autonomy apart from building rigidity in the tax structure.

"The wisdom which dawned on my friends in the Congress party had not dawned on them when Pranab Mukherjee (as finance minister) introduced the GST (in 2011)," Jaitley said, criticising the opposition party’s stand. "It did not dawn on them when (the then finance minister) P Chidambaram accepted the standing committee recommendations, but to come out with the preposterous suggestion that tariff must be mentioned in the Constitution document so that in a given exigency if tariff has to be altered you need a two-third majority in both houses of Parliament and has to go to each of the states," he said.

Jaitley said it is "extremely unfair" to the country "if we try to impose in the name of political compromise, a GST with a defective architecture".

The government, however, is open to the suggestion on the 1 per cent levy though it may have to look for another way to compensate manufacturing states such as Maharashtra and Gujarat that fear revenue loss under GST, which is a consumption tax.

Jaitley said the present world is full of turmoil and volatility and the government is trying to put firewalls around the economy to shield it from any crisis.

The government has ushered in a number of reforms over the past one year, including liberalising the FDI framework, rekindling the infrastructure sector particularly roads, streamlining approvals including environment clearances, unveiling package for power sector, and conducting successful auctions for coal and spectrum, to get the economy back on track.

"We must seize opportunity, cut corners where they exist so that we can take cumulative steps to attract investors," the finance minister said. He also said what the Islamic State, or ISIS, is doing poses a new danger to the civilisation and the impact on global economy cannot be understated.