BJP-ruled states to skip meet, may seek dissolution of panel

Modi wrote the letter a day after the chairman of the Committee, West Bengal Finance Minister Amit Mitra called for a meeting of all state finance ministers to discuss issues relating to revenue resources outside GST, scope of taxation (apart from GST) and on other matters. The meeting is scheduled on December 14 in New Delhi.

“The EC has neither been assigned new functions nor a fresh mandate has been given to it,” Modi said as he sought deferring of the meeting.

The move is seen as the latest development in the ongoing tussle between the BJP and TMC. The BJP has been making inroads into the TMC ruled West Bengal, worrying the ruling party. The slug-fest between the leaders and the rivalry have intensified after Mukul Roy, a top leader of the TMC had joined BJP recently. TMC leader and Chief Minister Mamata Banerjee has been vocal in her criticism against Prime Minister Narendra Modi and the BJP.

In his letter to Mitra, Modi pointed out that the Committee was set up for monitoring the implementation of uniform floor rates of sales tax by states and the phasing out of sales tax based incentives and to decide milestones and methods for switchover to a system of VAT by the states as well as monitoring reforms in the Central Sales Tax system in the country. He also noted that the Empowered Committee in 2008 had agreed to work with the central government to prepare a roadmap for introducing a national level GST.

Talking to reporters in Kolkata, Modi, who was there to attend a program, said: “It (the committee) cannot take up any mandate suo motu. The mandate has to be given by the Finance Minister first.” However, he said that he was not calling for dissolving the committee.

“It is also important to note that most of the major indirect taxes are already subsumed in GST, taxes on fuel are moving towards sub-summation in GST and that the methodology of extending GST to fuels can and should be discussed in the GST council,” the BJP leader said in the letter. He said the Union Government “routinely consults the states on issues relating to formulation of fiscal policies and on financial matters through its pre-budget meets with the state finance ministers.”

In the light of the central government resolution constituting the Empowered Committee and the subsequent announcement in the Budget speech of the then Union 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 added.