Empower GST Council with taxing powers, recommend best practices: Sushil Modi

Published On: 09, Dec 2017 | Source: financialexpress.com

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, Bihar’s deputy chief minister and GST Council member Sushil Modi said.
He said while the Centre constituted the empowered committee, it did not give the committee a mandate to discuss issues like states’ revenue position post GST and taxing powers of the state. There are resources outside GST that need to be administered. 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.
“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 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% 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% and 18 % 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.