Govt optimistic on GST, but Cong won't budge

Finance minister Arun Jaitley today expressed confidence that the proposed goods and services bill will pass the Rajya Sabha test with the congress leaders signalling willingness to compromise as long as the government takes into account its concerns.

However, the opposition party insisted that the GST rate should be set at less than 20 per cent and that they are also not ready to compromise on the demand to scrap the 1 per cent tax proposed for manufacturers and the setting up of an independent dispute resolution mechanism for GST.

"Unless the government responds on this we will not compromise," they said.

Finance minister Arun Jaitley had on Wednesday told NDTV that he was optimistic that the GST bill will be passed in this session. "Consensus can be built through discussion...numbers are with the GST bill, most parties support it," Jaitley had told NDTV.

Congress president Sonia Gandhi and her son and Congress vice president Rahul Gandhi today told NDTV that for their party the "three issues" on the Goods and Services Tax or GST bill were non-negotiable.

Congress wants to cap the rate of GST at less than 20 per cent, scrap a proposed state levy and create an independent mechanism to resolve disputes on revenue sharing between states.

The two leaders also countered finance minister Arun Jaitley's assertion that he had spoken to every Congress leader on GST.

"The finance minister came and called on us separately to give us his daughter's wedding invitation. It was a personal call," the Gandhis told the news channel.

The BJP-led government needs Congress' support to push the bill through in the Rajya Sabha or the upper house of Parliament, where it is in a minority.

It was the Congress that first proposed the tax when it was in government, but the party followed stalling tactics after the Modi government assumed power 18 months ago.

The bill has passed the lower house of Parliament, but has been blocked in the upper house where Modi's coalition lacks a majority.

The government is trying to win over small regional parties to build the two-thirds majority required to pass a key constitutional enabling amendment, but needs to bring round Congress to be sure it can pass.

The government wants to implement GST by April 2016, but the deadline may be missed if Parliament does not pass the bill in the winter session.

The GST will do away with state levies and create a single market for India's $2 trillion economy, giving a big boost to commerce and industry.