Despite Constitutional amendments, GST Bill might have to wait till winter session

NEW DELHI: The Constitution amendment bill for framing the law for setting up the Goods and Services Tax regime may be passed in this session of Parliament. But the GST bill may have to wait till the winter session due to lack of consensus between the Centre and states on the proposed 18 per cent GST rate, sources said after two rounds of formal negotiations between the government and Congress on Thursday.

Once the Constitution amendment bill is passed in this session, perhaps next week itself the finance ministry could initiate further negotiations with the Empowered Committee of State Finance Ministers and the GST Council with the aim of arriving at a consensus on a feasible GST rate so that the bill could be passed during the winter session, sources added. This will, however, mean a delay in the actual rollout.

Once the government manages to arrive at a consensus with the empowered committee and GST Council, Congress will insist on giving a ‘legislative framework’ to GST rate by putting it in the subordinate central GST bill. There are indications, as ET reported earlier, that the government and Congress could agree on this as a compromise on earlier Congress demand for capping the GST rate in the Constitution amendment bill. By then, the government will also explore an agreement with Congress on its demand for restructuring the GST dispute mechanism panel.

This is the roadmap for a two-phase GST legislation passage that emerged as a broad agreement during two rounds of negotiations between the government and Congress representatives on Thursday, ET has learnt. Both sides will also hold one or two rounds of talks in the coming days to give the final touches before the announcement.

In the first round of negotiations, FM Arun Jaitley and revenue secretary Hasmukh Adhia met Congress leaders Ghulam Nabi Azad, P Chidambaram and Anand Sharma. In the second round, Jaitley and the government’s chief economic advisor Arvind Subramanian met the same Congress team. It is learnt while Congress broadly agreed on the government bringing the Constitution amendment bill for passage next week, it insisted the GST bill can’t be brought now as it has to wait till a consensus on GST rate is reached.

Sharma said: "The government and Congress representatives held two crucial rounds of negotiations on Thursday. There were meeting grounds on many key issues. We have now entered a very decisive phase of finding an agreement on GST issue."