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Zeroing in on a revenue neutral rate for the Goods and Services Tax, during the ongoing winter session, could be difficult, as the Centre is yet to notify the dates for the crucial meeting of the Empowered Committee of State Finance Ministers.
April deadline “If the government wants to meet the April 1, 2016 deadline for implementing GST, it has to get the States on Board. This is where the Empowered Committee plays a crucial role, as the rates proposed by various committees will need to be ratified before it is taken up by the GST council,” a senior official associated with the empowered committee said. The meeting was expected to be called during the ongoing winter session of Parliament so that the decision could be expedited. The session is to end on December 23.
However, no notice has come for any meeting as yet, sources close to the development told BusinessLine .
NIPFP to rework report While the Centre had asked its Chief Economic Advisor Arvind Subramanian to suggest possible revenue neutral rates, the Committee had separately asked the National Institute of Public Finance and Policy (NIPFP) to rework its earlier report and suggest fresh rates.
The NIPFP, in earlier report to the Committee, had suggested a revenue neutral rate of 27-28 per cent, which according to the members was very steep. Though NIPFP is yet to submit its final report, but indications are that it could suggest a rate of 22 per cent.
Besides, the Centre is yet to firm up the name for new Chairman of Empowered Committee, a position which has been lying vacant over a month since the previous Chairman – Kerala Finance Minister KM Mani — resigned following allegations of bribery.
The trend has been that a Finance Minister from the State which is not been ruled by the same party that is at the helm of affairs at the Centre is selected.
Finding a new chief “The committee can meet without a full-time Chairman, as was the case when November 20 meeting happened. But, to ratify important decisions like rates, a full-time Chairman is required,” the official added.
The last meeting of the Committee was chaired by Delhi Deputy Chief Minister Manish Sisodia, who was nominated to by the Committee members.
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