The empowered committee of state finance ministers is likely to meet on March 20 to select the panel's chairman, a move which assumes importance in the wake of the Centre targeting 2016-17 as the year to roll out the Goods and Services Tax (GST).
As various names such as that of Gujarat Finance Minister Saurabh Patel, Punjab Finance Minister Parminder Singh Dhindsa and Kerala Finance Minister K M Mani are doing the rounds, sources said there is no front-runner and state finance ministers would select the chairman from among them.
The empowered committee is set to appoint the new chairman, as Abdul Rahim Rather, former finance minister of Jammu & Kashmir (J&K), lost the Assembly elections from the Charar-e-Sharief constituency, ending his 37-year stint in the J&K legislature.
The committee was set up by the Atal Bihari-led National Democratic Alliance (NDA) government in 2000. It was mandated with facilitating the states to switch from sales tax to value-added tax (VAT) regime. On April 1, 2005, state-level VAT replaced sales tax in a number of states; some, such as Uttar Pradesh and Tamil Nadu, joined later. Subsequently, the committee was mandated with facilitating states to switch to a GST, in consultation with the Centre.
Former West Bengal finance minister and Communist Party of India (Marxist) leader Asim Dasgupta was the committee's chairman since its inception till 2011. He was followed by Bharatiya Janata Party's Sushil Kumar Modi and, subsequently, Rather. Under Rather's chairmanship, Union Finance Minister Arun Jaitley was able to broker an agreement with the states on GST, before tabling a constitutional amendment Bill in this regard in Parliament.
Except for Rather, the two earlier chairmen were from the opposition-ruled states. Modi was selected when Pranab Mukherjee was the Union finance minister during the UPA regime.
Rather broke this tradition as he is from the National Conference, an ally of the UPA.
The role of the chairman of the GST panel assumes importance since the constitutional amendment Bill on the new indirect tax, pending in the Lok Sabha, requires assent of at least half of the total states -15 - to make it a law.
There were major differences between the states and the Centre over inclusion of petroleum in GST. Ultimately, it was included in GST, but the Centre was allowed to impose excise duty and the states VAT till the proposed GST council decides on the issue.
