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Personally, for Amit Mitra managing consensus on GST will be a boost to his career. Photo: Ramesh Pathania/Mint
Personally, for Amit Mitra managing consensus on GST will be a boost to his career. Photo: Ramesh Pathania/Mint

All eyes on Amit Mitra as Kolkata readies for crucial GST meet

The empowered committee of state finance ministers, chaired by Amit Mitra, will converge in Kolkata on 14-15 June to finalize the GST design

Kolkata: For West Bengal finance minister Amit Mitra, Tuesday’s meeting of the empowered committee of state finance ministers (FMs)—which he chairs—certainly ranks among the most important engagements ever.

The instructions from his boss, Trinamool Congress chief and chief minister Mamata Banerjee is unambiguous: generate a consensus over the proposed Goods and Services Tax (GST), which at present is a political bone of contention. The GST, once implemented, will economically unify the country.

Personally, for Mitra, who has served the industry for more than a decade as the secretary general of the Federation of Indian Chambers of Commerce & Industry (Ficci), managing consensus will be a boost to his career. But, the CM’s aides say, it will mean much more for Banerjee. They believe it would a perfect plank to articulate Banerjee’s ambitions to play a larger role nationally.

To be sure, West Bengal will gain from the introduction of GST, being a state which consumes more than it produces. And given its indebtedness, it is a good thing.

Mitra, who is now serving his second term as the state’s finance minister,says, “You must remember Ms Banerjee has been supporting GST from as early as 2009 completely on the merit of the proposed tax reform."

Last week, addressing the business community in Kolkata, Banerjee said while she had her political differences with the Bharatiya Janata Party (BJP), but on nationally important reforms, she was willing to extend support. She expressed her urgency by publicly asking Mitra, who was seated by her side, to do whatever it takes to get the bill passed in the next session of Parliament.

Stakes are high for Mitra, widely seen as a deft negotiator and is not missing a trick to be the perfect host to state FMs who will converge in the state capital on 14-15 June to finalize the GST design.

While there is an overall consensus among states and the centre for GST, differences persist among states on the fine print as they look to protect their revenues.

Getting states and the centre to agree on a common revenue threshold limit, ironing out differences over dual control by both the centre and the state over traders will be some of the issues that will test Mitra’s negotiating skills.

But will the Congress yield if Mitra succeeds in brokering a compromise?

According to Andhra Pradesh finance minister Yanamala Rama Krishnudu, the proposal of GST was actually mooted by the Congress-led United Progressive Alliance, a reason why Congress should not be objecting in the first place.

Ominiously, however, five state FMs, reveal insiders, are skipping the meeting citing prior commitments.

Sunil Jain, partner at J Sagar Associates, a law firm, said for GST to be implemented by 1 April 2017, it is important that states and the centre lock down the design of GST at the earliest. “It is important that the states and the centre come arrive at a consensus regarding threshold levels, dual control and revenue neutral rate so that these can be incorporated in the draft legislation that will follow the constitution amendment bill’s passage," he said. “We have a number of thresholds across various tax laws in the direct and indirect tax side. There is a need for uniformity and one threshold," he added.

Remya Nair in New Delhi contributed to the story.

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