GST debacle: BJP vs. Congress

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Basant Gupta, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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It has been weeks since we as citizens of India have seen as any progress on Goods and Service Tax (GST). The monsoon session of Parliament ended with almost no work being done, and there was no progress made on approving the legislation to implement the law. Congress and BJP don’t seem to come to an agreement. Rahul Gandhi led Congress has set their terms and conditions to pass the bill in parliament.

A panel set up by the government has proposed revenue-neutral rates (RNRs) for the central and state components of the proposed goods and services tax (GST) at 12.77% and 13.91%, respectively but with no upper limit cap. The Congress does not go in sync with this. They don’t want a GST where there is no upper cap on taxes. thy are demanding a limitation on the maximum tax that cab be charged. Secondly, BJP inserted a clause that compensate manufacturing states with 1% extra levy. At same time it subsumes some taxes (like excise) which currently accrue to manufacturing states. This stand is also being opposed be Congress party. Thirdly, Congress is crying about that the FM proposed rate of 25-27% on some commodities. sharply higher than the 16-18% revenue neutral rate.

It is high time people of India are beginning to smell a political stifle between the two parties. When Congress was at the power, BJP was opposing the bill. Now when it is time for BJP to pass the bill, Congress is opposing it. Behind the political curtain there is a reasonable consensus on GST. Congress just wants to make sure that BJP doesn’t take credit of this reform. Again it seems that the battle of egos will win over the development of India.

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