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'Bihar results setback for Centre's GST agenda'
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SME Times News Bureau | 09 Nov, 2015
The Bihar assembly elections
result is a setback for the BJP-led central government's plans to pilot
the Goods and Services Tax (GST) Bill through parliament, an expert said
on Sunday.
"The opposition parties will become emboldened with
the Bihar elections result, which will make it more difficult for the
(Narendra) Modi government to go through with the GST Bill," economist
Arun Kumar, till recently a professor at Jawaharlal Nehru University
here, told IANS.
In Bihar, the Grand Alliance of Chief Minister
Nitish Kumar's Janata Dal-United, Lalu Prasad Yadav's Rashtriya Janata
Dal and the Congress was poised to win 161 seats in the 243-member
assembly.
The GST seeks to create a single Indian market by
subsuming most indirect taxes levies of the central and state
governments, such as excise duty, service tax and value-added tax that
is seen as facilitating tax compliance, and curbing inflation through
better supply chains.
The central government has set the target
for its implementation from April next year, but it is currently stuck
in parliament, especially over the cabinet's nod to some changes
recommended by a parliamentary panel, notably an extra one percent levy
to compensate the states for potential tax losses.
"The Bihar
results will also be a shot in the arm for dissenters within the BJP,
while the government would henceforth be less one-sided and more willing
to compromise on GST and other contentious legislation," Arun Kumar
said.
Pointing out that differences on the GST bill were less
over fundamentals and had become more a matter of scoring political
points, Arun Kumar said a compromise was possible.
"The
government will be willing to compromise, even on other major economic
legislation like the Whistleblowers Bill for protecting informants,
which the government was trying to dilute protection provisions. This is
better from the governance perspective," he said.
The opposition
has been against the extra 1 percent GST levy as they feel this would
not only push up prices, but also have a cascading effect.
In
this regard, the Confederation of All India Traders (CAIT) has appealed
to Finance Minister Arun Jaitley to withdraw the proposed additional
tax.
"Levy of 1 percent additional tax on inter-state trade will
certainly lead to distortion in GST and will have cascading effect,"
CAIT president B.C. Bhartia and secretary general Praveen Khandelwal
have said in a joint statement.
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