GST: Bengal, Kerala FMs object to amendment not agreed by them

Finance Ministers of West Bengal and Kerala have objected to an amendment in the GST Bill, which was “not approved” by the Empowered Committee looking into the legislation.

In their letters to Finance Minister Arun Jaitley, West Bengal Finance Minister Amit Mitra and his Kerala counterpart T M Thomas Isaac raised the issue of depriving the states of the share of Integrated Goods and Services Tax (IGST) revenue.

Hours after the changes to the Constitution (122nd Amendment) Bill, 2014 became public, they wrote that this was neither discussed nor decided in the Empowered Committee of Finance Ministers.

While Mitra, who belongs to Trinamool Congress, sent his letter on Wednesday, Isaac, who represents CPI(M) shot off the letter on Thursday. Though the contents of the letters were not mentioned, CPI(M) MP Sitaram Yechury raised the matter during discussions on the Bill.

In his letter Isaac said, “I note with great concern that the Bill departs from the consensus arrived at the Empowered Committee of State Finance Ministers, much to the detriment of the interest for the states.”

According to Isaac, the changes suggested in Article 270 of the Constitution by the government were not discussed in the last meeting of Empowered Committee.

“This goes against the decision of the Empowered Committee of 2014 where it was decided that the residual amount in the IGST account shall be shared with the states as per Finance Commission formula. The proposed amendment also goes against the basic design that all taxes of the Union in any given year should form part of the divisible pool and should be shared with the states,” Isaac said

Surprised at the “unexpected” amendments, Mitra also said this would deprive the states of the share of IGST revenue. “This amendment has never been discussed in the EC and as such there has been no consensus on it,” he added.

(An edited version appeared in Deccan Herald on Aug 4, 2016)

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