BJP-JD(U) split may hamper GST reforms

The widely anticipated split between JD(U) and the BJP in Bihar may cast fresh uncertainty over the much-awaited reforms measure, the proposed Goods and Services Tax (GST). Saubhadra Chatterji reports....

The widely anticipated split between JD(U) and the BJP in Bihar may cast fresh uncertainty over the much-awaited reforms measure, the proposed Goods and Services Tax (GST).

HT Image

As BJP’s Sushil Modi, the finance minister of the Nitish Kumar government, will have to relinquish his chair, the Centre will also have to look for another chairman for the empowered committee of state finance ministers. Modi’s possible exit comes at a crucial stage for the GST bill as the ministerial panel was about to consider a fresh set of proposals to roll out the ambitious tax reforms measure that has already missed several deadlines.

The first chairman of the panel, Ashim Dasgupta of West Bengal, also had to go mid-way before finishing his job. Dasgupta, the finance minister of the Left Front government, had to quit after the Mamata Banerjee-led Trinamool Congress swept to power in Bengal in 2011.

The Modi-led panel held its last meeting at Mussorie last month. It was decided that new proposals such as raising the exemption threshold for small and micro enterprises and introducing a compensatory value-added tax for inter-state trade instead of the integrated GST, will be considered.

The committee had also suggested that the states may consider fixing the annual turnover threshold at Rs 25 lakh for GST. With Modi possibly going out at this critical juncture, the panel is set to start afresh with all these proposals, said sources. The parliamentary standing committe