GST Bill stalemate: PM Narendra Modi breaks ice, reaches out to Sonia Gandhi, Manmohan Singh

Prime Minister Narendra Modi’s meeting with Congress PresidentSonia Gandhi and his predecessorManmohan Singh on Friday evening — intended to resolve the imbroglio over the goods & services tax (GST) Bill — yielded no immediate outcome but may have broken the ice, giving some hope to the government that a deal could be reached soon. Both sides parted with the understanding that they would meet again.

“With regard to the GST Bill, the subject was discussed. Congress leaders explained their position on the three issues while the history and background of the issue was explained to them (by the government). Congress will discuss the issue within the party and get back,” Finance Minister Arun Jaitley told reporters after the meeting. Jaitley and Parliamentary Affairs Minister M Venkaiah Naidu were present at the meeting.

Jaitley said the two sides may establish “fresh contact” soon after Congress has discussed the matter internally. Sources said the government did put forward some proposals.

The government is keeping its fingers crossed as there was no clear indication from Congress during the meeting on supporting the Bill as it sought time for internal discussions, according to the sources cited.

A government official familiar with the discussions said one more meeting may be required at the level of the prime minister on the issue. He also said the government was willing to consider two of the three Congress demands — scrapping the 1 per cent inter-state tax and setting up an independent dispute-settlement mechanism.

Soon after the meeting at 7, Race Course Road, Sonia is learnt to have informed Congress floor leaders Ghulam Nabi Azad, Anand Sharma and Mallikarjun Kharge on what transpired.

“During the talks with the PM and other ministers, Soniaji and Manmohanji have told them (about) the three demands Congress has on the GST Bill — the need to fix 18 per cent cap, scrapping the 1 per cent inter-state tax and the need for an independent dispute-settling mechanism in GST Council. These are not bargaining points or attempt to score political points,” Sharma said.

“Congress truly thinks these changes have to be made in the Bill in order to make GST more inclusive in line with international standards,” Sharma said. “During the meeting, the first of its kind in 18 months, both sides have explained their respective views and, as the government side said, there would be more deliberations both inside our party and with the government side. Congress is for GST, but we should not rush into it,” he added.

In their first structured meeting since the May 2014 elections, Modi and Sonia Gandhi discussed the Constitution (122nd Amendment) Bill during which the latter — accompanied by Manmohan Singh — reiterated the three Congress objections.

The meeting also appeared to have been held to assuage the wider concern expressed by Congress that the government was not engaging in discussions on the GST Bill.

Earlier remarks by Congress Vice-President Rahul Gandhi appear to cast doubt on the outcome of the meeting. “The move by the PM is due to public pressure and does not reflect this government’s intent,” Rahul said.

On being asked if Congress would support the Bill if the government agreed to its conditions, he said, “Probably”.

“We have our differences, but we want GST to be passed. We want to put a cap on tax. We want to ensure the poor don’t suffer. We (Congress) are the ones who brought GST and are in favour of it,” he said.

Earlier this week, the Congress leader had said at a public meeting in Bengaluru that his party “strongly believes in GST”.

While Jaitley had been holding talks with Leader of the Opposition in Rajya Sabha Ghulam Nabi Azad and leader of Congress in Lok Sabha Mallikarjun Kharge to reach a consensus on the GST Bill, this was the first time PM Modi has reached out to the Grand Old Party.

The meeting between PM and Sonia Gandhi holds significance because this is first high-level dialogue between the government and the principal opposition party in the 18 months the National Democratic Alliance government has been in power. During this period, Congress has not only held up the GST Bill but also forced the government to put the controversial land acquisition Bill in cold storage.


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