New Delhi: Uncertainty surrounding the goods and services tax (GST) is set to deepen with speculation rife that K.M. Mani will be asked to step down as the finance minister of Kerala over allegations of corruption.
Mani heads the empowered committee of state finance ministers working out how to implement the GST. If Mani steps down as Kerala’s finance minister, he will also have to step down from the post of chairman of the empowered committee.
This will force the government to again search for a new committee chairman at a time when the process of legislating the GST is in its last leg.
Mani took over as the empowered committee chairman in March this year after Abdul Rahim Rather, who was the finance minister of Jammu and Kashmir, stepped down after the National Conference’s loss in state assembly elections.
The empowered committee will play a crucial role in putting together the final contours of GST’s design and spearheading the implementation of the tax, which will economically unify the country by dismantling state-level barriers to trade in goods and services.
State finance ministers are due to meet on 20 November to endorse the state GST law, central GST law and integrated GST law for inter-state transactions.
The 122nd constitution amendment bill for the implementation of GST is awaiting legislative passage in the Rajya Sabha.
The government is hoping that the opposition will extend support to the bill in the upcoming winter session starting on 26 November.
The bill, which has received the Lok Sabha’s approval, needs to be passed by a two-thirds majority in the Rajya Sabha and then ratified by 50% of state assemblies.
Although the government is likely to miss the 1 April 2016 deadline for rolling out GST, it is hopeful of doing so sometime later in the next fiscal year.
“Once the constitution amendment bill is passed, it will not take long for the other supporting legislation to go through,” said a finance ministry official who did not wish to be identified. “We can implement it any time in 2016-17.”
Questions have been raised about the impact of the ruling National Democratic Alliance’s electoral debacle on the government’s reforms agenda.
Citi India, in a note on Monday, said: “We are still hopeful that the GST constitution amendment bill will get passed/make further progress in the winter session of the parliament, though we recognize that it will be a challenge to implement it by April-16 due to vast legislative/operational procedures involved.”
Mani may tender his resignation on Tuesday or will be asked to resign from his post, PTI reported. “A final decision will be taken in the meeting of the Kerala Congress party scheduled on Tuesday morning,” Mani told reporters.
The Kerala Congress is a part of the Congress-led United Democratic Front that rules the southern state.
Mani has battled allegations for a year now that he accepted bribes in return for giving licences to bars operating in Kerala. On Monday, the Kerala high court ordered investigations against him to continue, sparking demands for his resignation.