GST likely only from April, 2017

Legislation not listed in Parliament agenda for the coming week

The Narendra Modi-government may wait for the Budget session to get the Constitution Amendment Bill for introduction of Goods and Service Tax passed. The Bill has not been listed for consideration during the week starting August 3.

If the Constitution Amendment Bill does not get passed during the current session, the chances of implementing the GST from April 1 next year will be bleak. In such a situation, the new indirect tax system would be in a place only a year later, that April 1, 2017, as such a taxation system cannot be implemented in the middle of a fiscal year.

A Constitution Amendment Bill needs order in the House to get passed.

But continuous disruption has virtually stopped legislative business in both the Houses and the situation is unlikely to change during the remaining nine sittings of the Monsoon session. Government managers feel the situation will be somewhat similar during the Winter session.

However, “there will be some change in the composition of the Rajya Sabha before the Budget session. Even then, the Government will not be in majority, but chances could still be bright as protests will subside by that time,” a government source said.

Rating agencies

But, any delay in the introduction of GST will not go down well with international rating agencies.

Moody’s, in its latest report, has cautioned that lack of reforms in areas such as land acquisition, labour laws and GST could derail medium-to-long term growth prospects.

“Green shoots are slowly emerging, but the government’s failure to deliver promised reforms is the major impediment,” it said, adding that the logjam in Parliament is hindering passage of key reform Bills. “Given the political seesaw, these are unlikely to be delivered until later this year or even 2016,” it said.

Highlighting these warning signals, Parliamentary Affairs Minister M Venkaiah Naidu said passage of important legislations is ‘very crucial to give much desired momentum to economic growth.’ “All responsible stake holders should take these warnings very seriously. Reforms are very necessary,” he said, urging the Congress to reconsider its stand and allow normal functioning of Parliament.

Opposition’s demand

Pointing out that land and GST Bills were sent to parliamentary committees due to the Opposition’s demands, he said the government has “walked the extra mile” to meet their demands, especially those of the Congress and recalled that it had given assurance that it would help the passage of GST Bill in the monsoon session.

Meanwhile, despite the Union Cabinet approving official amendments in the Bill, as suggested by the Select Panel, the legislative agenda for the week starting August 3, does not mention the Constitution Amendment Bill for consideration and passage. Interestingly, the Government is still hopeful of getting the nod.

Once this is done, then the legislation needs approval from at least 15 State Assemblies before the Presidential assent. After this, the Centre will have to enact legislation for Central GSTs and another one for Integrated GST (IGST), while States will be required to approve legislation for SGST.

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