Congress demand to cap GST rate is difficult to accept: Arun Jaitley

Finance Minister Arun Jaitley has said that it’s difficult to accept congress’ demand to have a cap on Goods and Service Tax (GST) rate at less than 20 percent in a Constitution Amendment Bill pending in Rajya Sabha. The minister however is hopeful that biennial elections in the Rajya Sabha will give it enough seats in the upper house of Parliament to pass the Goods and Services Tax (GST) Bill.

Jaitley said the demand for cap is difficult to accept because they would need to amend the Constitution every time for changing the rate, which will be decided by the GST council. He further added that such a move would limit the scope of making future changes.

The GST Bill has already been passed by the Lok Sabha and is pending ratification by the Upper House, where the ruling NDA does not have a majority. After it is approved by the Rajya Sabha, the legislation needs to be approved by half of the 29 states so as to roll out GST possibly by October 1. The government has support of 155 members in the 242-member Rajya Sabha, short of two-third or 162 votes needed to approve the Constitution amendment bill.

The Congress, the original author of the tax reform, is opposed to the current 'flawed' version and wants GST rate to be capped at 18 per cent, a proposed state levy scrapped and an independent mechanism to resolve disputes on revenue sharing between states.