Reformed GST: Senate okays proposals despite opposition

The recommendations on the RGST bill have been approved, bill passed to National Assembly for further consideration.

ISLAMABAD:

Amid protests and uproar from both allies and opposition, the government on Friday managed to get the recommendations of the standing committee on proposed reformed General Sales Tax (GST) Bill passed by the Senate, forwarding them to the National Assembly for final approval. The Senate can only make recommendations to a monetary bill and is not empowered to approve or reject it.

In what seemed an act of political chicanery, the Pakistan Muslim League – Quaid (PML-Q), the biggest opposition party in the upper house, staged a walkout, paving the way for the passing of recommendations by the Senate through a voice count, despite opposition from the Muttahida Qaumi Movement (MQM), Jamiat Ulema-e-Islami (JUI) from the treasury and Pakistan Muslim League – Nawaz (PML-N) and Jamaat-e-Islmai (JI) from the opposition benches, along with other smaller political parties.

Senator Ahmed Ali of MQM, who heads the Senate standing committee on finance and economic affairs, presented two reports of the committee on the GST bill 2010 and the Finance (amendment) bill 2010, after initial reluctance. The committee made 15 recommendations relating to GST bill and four recommendations for the Finance (amendment) bill. The recommendations have been sent to the National Assembly for consideration and inclusion in the respective bills.

The committee has recommended that food items, stationery and medicines should be exempted from the sales tax and that flood tax should be imposed on taxpayers having annual income above Rs500,000, instead of every taxpayer.

Wasim Sajjad of PML-Q moved a note of proposal in  the house for incorporation of some fresh recommendations and putting the bill to vote.

Senate chairman Farooq H Naek rejected the proposal, saying all parties were asked to make their recommendations within two days of tabling the bill on November 12, prompting a walkout from the house by PML-Q senators as others chanted slogans against the bill.

Amid the chaos, Naek put the motion for approval of recommendations before the house for a voice count and prorogued the House after declaring that the motion was passed. In case the MQM and JUI remain adamant in their opposition of the bill in the National Assembly, it will be a real challenge for the government to muster simple majority for the contentious piece of legislation.

With PML-N strongly opposing the bill, the government might have to rope in the ambivalent PML-Q to either support the bill or abstain from voting against it.

Published in The Express Tribune, November 27th, 2010.

Read the complete RGST bill here.