Monsoon Session ends without passing GST Bill

The Monsoon Session of the Rajya Sabha ended before lunch on Thursday without the passage of Goods and Services Tax Bill, after opposition protests that prevented the house from functioning every day of the three-week sitting.

The proposed GST Bill is the biggest tax overhaul since independence from Britain in 1947. It will subsume myriads of federal and state tax levies, replacing a chaotic structure that inflates costs.

The delay in passing the law will make it difficult for Prime Minister Narendra Modi to meet a self-imposed deadline of next April 2016 for its launch.

The government could now call a special sitting of Parliament once it has ironed out differences. Otherwise, it will have to wait until a session late in the year.

Supporters of GST say it will add up to 2 percentage points to economic growth by cutting red tape and making it easier to move goods and services around the world's second-most populous country.

"India could have five years of double digit GDP growth if the GST is in place," Adi Godrej, chairman of Godrej Group said.

For years, businesses have lobbied for the new sales tax which will subsume myriads of federal and state tax levies, replacing a chaotic structure that inflates costs.

Prime Minister Narendra Modi, on the back foot over popular opposition to his bid to make it easier to buy farmland for industry, had made passing the less controversial GST Bill his main objective in the session.

But the opposition Congress party Modi defeated in a general election last year seemed determined not to give him any major victory ahead of his annual Independence Day speech on Saturday, not even support for a Bill it originally wrote while in office.