Jaitley agrees with Congress proposal to cap GST rate at 18%

NEW DELHI: Finance minister Arun Jaitley said he agrees to the Congress demand that the proposed Goods and Services Tax (GST) rate should not go beyond 18 %, brightening prospects of the passage of the legislation in the second half of the budget session.

“I am in agreement with them that the taxation rate must be reasonable. I also agree with the spirit of suggestion that it should not go beyond 18%. I have no difficulty with that,” Jaitley said in an interview.

The finance minister, however, added that the principal Opposition party’s demand to fix the cap in the Constitution amendment bill itself is difficult.

“There is only a difficulty about prescribing tax in the Constitution because you never know unforeseen emergencies. Therefore, the Congress will have to see the reasonableness of this particular view,” Jaitley said.

Once passed, the GST law will replace the myriad local levies and usher in India’s biggest tax reforms.

The Congress, up in arms against the BJP over the dis- missal of its government in Uttarakhand, however, ruled out any possibilities to cooperate with the party to pass the bill.

“The BJP should not expect any help when they are murdering democracy in Arunachal Pradesh, followed by Uttarakhand. The NDA government has vitiated the atmosphere in Parliament,” Congress leader Jairam Ramesh, a key strategist on the GST issue, told HT.

Prime Minister Narendra Modi had met Congress president Sonia Gandhi earlier this year for their first ever meeting and discussed the GST issue, but the logjam remained.

Jaitley said on Tuesday that he will reach out to the Congress again to get its support on the tax reforms.

“Left to myself, I will continue till the last moment to persuade the Congress,” he said.

Jaitley claimed the government has sufficient support to pass the GST bill but he would prefer to “do it with consensus because, after all, it is states that also have to implement this”.

I am in agreement with them (Congress party) that the taxation rate must be reasonable. I also agree with the spirit of suggestion that it should not go beyond 18%. I have no difficulty with that. ARUN JAITLEY, Union finance minister