Empowered committee has no GST role to play now: Sushil Modi

The empowered committee of state finance ministers has lost all relevance with the formation of the GST Council and has no mandate to discuss issues like states' revenue position post GST and taxing powers of the states, Bihar deputy CM and chairman of the empowered committee, Sushil Modi, has said.

The empowered committee on GST needs a fresh mandate to review the states' revenue position and discuss taxing powers of the states with respect to resources outside GST, Modi said.

The alternative is to equip the GST council powers to recommend best practices and taxing powers with respect to the states or centrally-sponsored schemes or devolution, Modi said.

The council should be empowered to recommend best practices and be given taxing powers with respect to the states or centrally-sponsored schemes or devolution, Modi said.

Modi's comments are seen as a show-down between the BJP and the Trinamool Congress. The Bihar deputy chief minister has also sought to postpone the 14 December meeting of the empowered committee of state finance ministers, stating that it has no relevance now.

''Most of the major indirect taxes are subsumed in GST. Taxes on fuel are moving towards sub-summation in GST and the methodology of extending GST to fuels can and should be discussed in the GST Council,'' Modi said, adding ''The empowered committee has neither been assigned new functions nor has a fresh mandate been given to it. I have requested the chairman of GST Council Amit Mitra to postpone the meeting scheduled on December 14, because the committee is expected to discuss the states' revenue resources and the best practices with respect to administering resources outside GST. The meeting is also supposed to discuss the scope of a state's taxing power and the issues related to the 15th Finance Commission. But how can such issues come up for discussion without the mandate given for it to the council,'' Modi said.

The empowered committee has already completed the task assigned to it. Now it requires to get new tasks. More than 90 per cent of the tax rate-related issues have been sorted out after the council brought down higher tax rates to lower rates of 178 items. The council would examine the possibility of merging the tax slabs of 12 per cent and 18 per cent to a new slab, so that the merged slab would be between the two tax rates.

''There are about 50 items in the bracket of the 28% tax rate and the number of items can be reduced from the highest rate. All these can be implemented after revenue stabilises and GST realisation becomes buoyant,'' he said while addressing an interactive session organised by Bharat Chamber of Commerce.

Modi has also given a suggestion to the council to make the displaying price tag on the items to be inclusive of all taxes.

Reports quoting sources close to the ongoing tussle, meanwhile, said the BJP-ruled states are likely to abstain from the meeting because ''there is a feeling that certain groups in the committee were trying to create a block and to put the central government in a dock.''

''The EC should be dissolved as it has no mandate to discuss the issues that have been listed,'' the sources were quoted as saying