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India's Modi to meet Sonia Gandhi to discuss tax reform

Indian Prime Minister Narendra Modi.
Valeriy Melnikov | Host Photo Agency | Ria Novosti | Getty Images

Indian Prime Minister Narendra Modi will meet opposition Congress party leader Sonia Gandhi on Friday evening to discuss a landmark tax reform and other bills to be debated in the winter session of parliament, his office said.

The face-to-face meeting between the two rivals would be the first since Modi's nationalist party won a landslide general election victory 18 months ago, and could herald a compromise on a proposed goods and services tax (GST).

"The prime minister has invited the opposition leader at his residence," a senior official in the Prime Minister's Office said. "It is a meeting to discuss key bills, including GST."

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The GST, billed as India's biggest tax reform, has been stalled for months because the government lacks a majority in the upper house of parliament.

But, after Modi's Bharatiya Janata Party (BJP) suffered a state election defeat, his government has shown greater willingness to compromise on opposition demands to tweak the tax reform to get it passed in the session that started on Thursday.

"For the first time the prime minister has realised the importance of discussing a policy issue with the opposition," said an aide to Sonia Gandhi, who confirmed she would attend the meeting at Modi's official residence together with former prime minister Manmohan Singh.

"We will discuss every aspect of GST with the prime minister and they will have to accept our demands," the aide added. Congress wants to cap the rate of GST at below 20 percent, scrap a proposed state levy and create an independent mechanism to resolve disputes on revenue sharing between states.