State finance ministers' panel mandate till GST rollout, not beyond: Sushil Modi
ET Bureau|
Updated: Dec 09, 2017, 08.02 AM IST
Bihar deputy chief minister Sushil Modi asked West Bengal finance minister Amit Mitra to postpone a proposed meeting of the empowered committee of state finance ministers, saying that the body doesn't have a mandate to discuss the matters said to be on its agenda following the July 1 rollout of the goods and services tax (GST).
The proposed meeting, scheduled to be held on December 14, aims to discuss state revenue resources and best practices in respect of those outside the GST, scope of state tax powers and issues related to the 15th Finance Commission. The Mitra-headed panel is also supposed to consider the committee's annual report and statement of accounts.
Modi told ET the empowered committee's mandate has not been expanded beyond GST; if Mitra wanted to call a meeting of finance ministers, he should do so separately.
"It cannot be called empowered committee to discuss issues beyond the GST, especially with the GST Council being in place," he said. "The empowered committee has neither been assigned new functions nor a fresh mandate been given to it. Accordingly, I have requested him to kindly postpone the meeting proposed to be held on December 14."
Modi said objectives of the committee had revolved around implementation of value added tax (VAT) instead of sales taxes prevailing in states and charting a roadmap for introduction of GST. With replacement of VAT or union excise duties or service tax with GST, the empowered committee has completed the task assigned to it, he said in the letter.
In light of the Central resolution constituting the empowered committee and the subsequent announcement in the budget speech by the finance minister, it is clear the "empowered committee does not have a mandate" to discuss issues like "state revenue positions and best practices in respect of resources outside GST and the taxing powers of the states or centrally sponsored schemes grants and devolution," Modi said.
His comments suggesting that the empowered committee has lost relevance reflect a possible conflict between the BJP and the Trinamool Congress and other opposition parties. Mitra had said on Thursday that the meeting would be held in Delhi next week. Mitra couldn't be reached for comment on Friday.
"It is important to note that most of the major indirect taxes are already subsumed in GST, taxes on fuel are moving towards subsumation in GST and that the methodology of extending GST to fuels can and should be discussed in the GST Council," Modi said in a letter to Mitra.
Speaking separately to reporters in Kolkata, Modi said he's in favour of letting tax revenues stabilise before the GST Council considers a merger or further rationalisation of slabs. "Let revenue stabilise and tax buoyancy come, then the council will look into rationalising or merging tax slabs of 12 and 18%," Modi said.
The proposed meeting, scheduled to be held on December 14, aims to discuss state revenue resources and best practices in respect of those outside the GST, scope of state tax powers and issues related to the 15th Finance Commission. The Mitra-headed panel is also supposed to consider the committee's annual report and statement of accounts.
Modi told ET the empowered committee's mandate has not been expanded beyond GST; if Mitra wanted to call a meeting of finance ministers, he should do so separately.
"It cannot be called empowered committee to discuss issues beyond the GST, especially with the GST Council being in place," he said. "The empowered committee has neither been assigned new functions nor a fresh mandate been given to it. Accordingly, I have requested him to kindly postpone the meeting proposed to be held on December 14."
Modi said objectives of the committee had revolved around implementation of value added tax (VAT) instead of sales taxes prevailing in states and charting a roadmap for introduction of GST. With replacement of VAT or union excise duties or service tax with GST, the empowered committee has completed the task assigned to it, he said in the letter.
In light of the Central resolution constituting the empowered committee and the subsequent announcement in the budget speech by the finance minister, it is clear the "empowered committee does not have a mandate" to discuss issues like "state revenue positions and best practices in respect of resources outside GST and the taxing powers of the states or centrally sponsored schemes grants and devolution," Modi said.
His comments suggesting that the empowered committee has lost relevance reflect a possible conflict between the BJP and the Trinamool Congress and other opposition parties. Mitra had said on Thursday that the meeting would be held in Delhi next week. Mitra couldn't be reached for comment on Friday.
"It is important to note that most of the major indirect taxes are already subsumed in GST, taxes on fuel are moving towards subsumation in GST and that the methodology of extending GST to fuels can and should be discussed in the GST Council," Modi said in a letter to Mitra.
Speaking separately to reporters in Kolkata, Modi said he's in favour of letting tax revenues stabilise before the GST Council considers a merger or further rationalisation of slabs. "Let revenue stabilise and tax buoyancy come, then the council will look into rationalising or merging tax slabs of 12 and 18%," Modi said.
