More likely, the constitutional amendment that allows for a Goods and Services Tax (GST), will be passed in this Monsoon Session of Parliament, says Japanese financial services major Nomura.
According to it, the expected timeline for the passage of the bill is by August 12 and there is a 60 per cent probability for this.
"We believe a constitutional amendment that allows for a goods and services tax (GST) is more likely than not to be passed during the ongoing Monsoon Session of parliament (July 18-August 12)," Nomura said in a research note.
The GST bill, which aims to change 29 states into a single market through a new indirect tax regime, was previously planned to be introduced from April 1, but the deadline was missed since the regulation to roll it out remains in limbo in the Rajya Sabha.
"We believe a compromise can be reached on the 18 per cent GST cap demand if the Congress either agrees to include the tax rate cap in the central government's GST bill (instead of the constitution) or if the Congress agrees to a much higher tax rate cap," Nomura added.
"According to the report, GST would have a mixed impact in the short term, because it may temporarily reduce growth, push up inflation and hurt state tax collections."
However, "we believe medium-term impact is unambiguously positive," the report said.
"Once the constitutional amendment is passed in the Upper House, it will need to be ratified by more than 50 per cent of the 29 state assemblies," it added.