India's opposition blocks tax reform legislation

AP News
Posted: Aug 11, 2015 9:22 AM

NEW DELHI (AP) — Opposition lawmakers on Tuesday blocked Prime Minister Narendra Modi's efforts to simplify India's taxation laws, a key part of his government's plans to boost Asia's third-biggest economy.

Finance Minister Arun Jaitely introduced the legislation in the upper house of Parliament with just two days left in Parliament's current three-week session.

The bill would replace India's multiple national and state taxes with a single tax regime.

Opposition Congress party lawmakers, whose support is crucial for approving the bill, blocked the proceedings. They instead demanded the resignation of three key ruling party leaders accused of abusing their authority and financial irregularities. The scandals are the first to hit Modi's government since it came to power last year.

Modi's Bharatiya Janata Party denies any wrongdoing by party leaders.

Jaitley said on Tuesday that the tax reform would turn India into a single market with a uniform rate of taxation for both goods and services. "It will help bring down prices as there will be no tax on tax."

The proposed legislation already has been approved by the lower house of Parliament where Modi's Hindu nationalist Bharatiya Janata Party commands a majority on its own. However, the government needs the opposition support in the upper house of Parliament for approving any new law.

The Modi government already has deferred until the next session of Parliament a bill to make changes to India's land-acquisition law following the Congress party's opposition.

The Congress party has disrupted Parliament's functioning for the past two weeks demanding the resignation of three BJP leaders for allegedly helping a former Indian cricket official who is facing investigation for financial irregularities and a multi-million dollar job recruitment scandal.