The Empowered Committee of State Finance Ministers will send a 60-member delegation to South Africa on July 24, to study its inter-state taxation system. Back home, the panel has failed to reach a consensus on the Goods & Services Tax (GST) regime, thus delaying its implementation.
Despite having travelled extensively and studied taxation systems of almost half the world, the panel has been unable to resolve the GST conundrum. Meanwhile, the South African tour starts just two days after finalisation of the panel’s next chief, at a meeting on July 22. The committee has been headless since last month, after then Bihar Finance Minister Sushil Modi resigned in the aftermath of his party BJP severing ties with the State Government. This will be the sixth foreign tour of the panel since 2006 and third since September 2011.
Apart from State Finance Ministers and even Chief Ministers, quite a few senior officials of the rank of Additional Secretary and Joint Secretary in the Union Finance Ministry too are part of the delegation.
During the 10-day safari, the delegation will visit all States and provinces of that country. In September 2011, the panel had visited France, Germany and luxembourg to study their taxation systems and toured Canada and Japan a year later.
According to sources, between June 2006 and August 2007, the committee had scanned geographies as varied as the UK and Italy in Europe, to Australia and Singapore and Brazil in South America on three separate tours.
Towards the end of his tenure, Sushil Modi had met Finance Minister P Chidambaram several times and a consensus had been forged, a fact negated by his exit. Soon after his resignation, The Pioneer had spoken to a section of the panel, and diverse views had emerged.
Sources still believe it would have been prudent to have first analysed afresh factors at the domestic front, rather than embarking on an inopportune study tour.
As for its new leader, precedent calls for a Finance Minister from an Opposition-ruled State. Before Modi, former Bengal Finance Minister Asim Dasgupta headed the committee.
Nonetheless, sources feel there are chances of a Congress candidate this time, Haryana Finance Minister Kiran Chaudhary being among the front-runners.
The GST Bill, introduced in Parliament in 2010, has been okayed by the Parliamentary Standing Committee on Finance, which finalised its report on it on July 19, 2013 and will present it in Parliament during the Monsoon Session. Its implementation, though, may be only by 2014-15, a fact even Prime Minister Manmohan Singh has acknowledged officially.