Sushil Kumar Modi, who ceased to be Bihar Finance Minister following the JD(U)-BJP split, on Monday resigned as Chairman of the Empowered Committee of State Finance Ministers looking into the implementation of the proposed new indirect tax regime -- Goods and Services Tax (GST).
“I have demitted my office as Deputy Chief Minister and Finance Minister, Bihar. I have also resigned from post of Chairman, Empowered Committee of State Finance Ministers,” he stated in a letter to Union Finance Minister P. Chidambaram.
In his letter, Mr. Modi pleaded for early payment of CST compensation to states to build the trust between states and union to ensure early roll out of the GST, which has missed several deadlines.
This development could delay the implementation of the GST further as the new Chairman would have to start afresh building consensus among all states.
In 2011, Mr. Modi replaced Asim Dasgupta, who had resigned following defeat of Left-front government in West Bengal.
The GST Bill, introduced in Parliament in 2010, is being vetted by the Standing Committee on Finance. After the committee submits its report, the states and the Centre would together finalise the draft and bring it back to Parliament.
Mr. Modi had earlier said that 80 per cent consensus has been built on the Bill.
The proposed GST will bring in a common tax regime for goods and services by subsuming most indirect taxes, and is expected to help increase revenue mop ups.
The GST rollout has missed several deadlines on account of differences over contentious issue of Central Sales Tax compensation and design of the GST structure between the states and the Centre.
Conventionally, the post of chairman of empowered committee has been with the opposition party. So now it is likely that the finance minister of a BJP ruled state or from Punjab or Odisha could chair the committee.