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The Centre has changed the composition of the group of ministers (GoM) on integrated goods and service tax (IGST) after finance minister decided to opt-out of the ministerial panel headed by her.
Deputy Chief Minister of Bihar, Sushil Modi has now been made chairperson of the GoM that is expected to deliberate and suggest measures for increasing the GST revenue.
Sources in GST Council said that the said changes has been made as finance minister Nirmala Sitharaman is also chairperson of the Council, which is expected to receive report from GoM and take further action.
So, this would have created a situation where the person finalising the recommendation is also to take further action on it.
"Inadvertently, Union Finance Minister was mentioned as Chairman of the GoM. Since Union Finance Minister who is also the Chairperson of the GST Council could not have headed the GoM as its report is required to be submitted to the Chairperson of the Council. In view of the above, a modification was made to the constitution of the GoM," Council sources said.
The GoM on IGST constitutes ministers and officers from states as well as the Centre. It is expected to suggest measures to boost GST revenue that has become important in wake of Centre delaying on demands of states to pay compensation as per agreed terms for less than targeted growth in GST revenue.
The GoM was constituted Subsequent to Union Finance Minister's meeting on December 4, 2019 with the Finance Ministers of Punjab, Madhya Pradesh, Rajasthan and Deputy Chief Ministers of Delhi and Pudducherry.
Several non-BJP ruled states have raised the issue of delay in payment of compensation by the Centre. In fact, GST compensation has not been paid to few states since August.
GST collections have been less than encouraging this year with the number crossing Rs 1 lakh crore only in November after remaining below the threshold for several months this year.
Kerala, West Bengal, Punjab, Delhi and Chhattisgarh, Madhya Pradesh, Rajasthan and Union Territory of Puducherry -- all non-BJP states -- are planning to knock at the door of the Supreme Court if their concerns are not addressed.
As per last fiscal numbers, States get an average cess compensation of about Rs 7,500 crore per month.