States want GST Council and FMs' panel, too

States want GST Council and FMs' panel, too

States want the empowered committee of state finance ministers to continue, though a GST (Goods and Services Tax) Council has been set up to recommend on key areas such as draft model Bills, rates, dual control of central and state officials over assesses.

"The states want the empowered committee to function parallel to the GST Council. The empowered committee will help states create consensus on key issues to be taken up by the GST Council," said a government official.

The GST Council is headed by the finance minister, while the empowered committee is chaired by a state finance minister. West Bengal Finance Minister Amit Mitra is the current chairman of the empowered panel. Doubts over the existence of the empowered committee arose after the constitution of the GST Council.

The committee was set up in 2000 to monitor implementation of uniform floor rates of sales tax by states and Union territories, monitor phasing out of sales tax-based incentive schemes and roll out of value-added tax (VAT) by states.

State-level VAT, introduced from April 1, 2005, in most states and subsequently in all states, will now be subsumed under GST along with service tax, excise duty at the central level and local taxes. With a GST Council in place, the argument is that the empowered committee may lose its purpose of existence. A state official pointed out that the empowered committee must continue as it not only discusses GST-related issues but also other taxation issues that might come up from time to time.

"The empowered committee of state finance ministers was set up not only for GST but to discuss taxation-related issues. The committee evolved consensus on VAT and now GST. There are a lot more issues to work on, which the committee will do now," he said without elaborating.

The empowered committee continues as of now, another official said, and might also meet soon. "The meeting will happen soon, but we have not yet decided on the dates. Will do that in consultation with the chairman," said the official.

Business Standard, New Delhi, 22 Septemeber 2016