Sushil Modi questions relevance of Amit Mitra-led tax panel

Opening a new battle front with the TMC, Bihar Deputy Chief Minister Sushil Modi on Friday said the panel headed by West Bengal Finance Minister Amit Mitra on state taxes has outlived its purpose and lost relevance after the GST launch.

Mitra as Chairman of the Empowered Committee (EC) has called a meeting of all state finance ministers to discuss issues relating to revenue resources outside GST and the scope of taxation, apart from the unified tax, in New Delhi on December 14.

The BJP leader, in a two-page letter, sought postponement of the meeting as "the EC has neither been assigned new functions nor a fresh mandate given" after introduction of the Goods and Services Tax (GST) that subsumed over a dozen central and state taxes.

Modi said the empowered committee was set up in 2000 to monitor implementation of VAT and later in 2008, it went about preparing a road map for introduction of a national GST.

"With the replacement of VAT, excise duty, service tax with GST, the EC has completed the task assigned to it," he wrote, adding that now the constitutionally mandated GST Council decides on tax issues.

Major indirect taxes, he said, have already been subsumed by GST and "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".

The EC "does not have a mandate to discuss issues like state revenue positions and best practices in respect of resources outside GST, the taxing powers of the states or centrally sponsored schemes grants and devolution", he wrote.

Mitra had convened a meeting of the EC to "consider approval of its annual report and statement of accounts for 2016-17". It has also been proposed to hold a regular meeting of the Committee after the meeting of its Governing Body on December 14 to "discuss state revenues resources outside GST, best practices in respect of resources outside GST, scope of tax powers of the states which continue to figure in Schedule 7 of list II of the Constitution and issues related to 15th Finance Commission".