Bring back consensual atmosphere to GST Council: Amit Mitra to FM

Our Bureau New Delhi | Updated on June 23, 2021

West Bengal Finance Minister Amit Mitra

Now would be time for us to pull together and rebuild trust and faith, he says in letter

West Bengal Finance Minister Amit Mitra on Wednesday called for course correction in the manner of functioning of GST Council. He alleged there was erosion of of cooperative federalism and commitment to consensus building in the Council meetings.

“Given the impending crisis that the GST regime is facing today, now would be time for us to pull together and rebuild trust and faith, not just hear but to listen to each other’s logic with an open mind as we have done, for many years in the past, when we cut across party lines and regional diversities,” Mitra said in a letter to Finance Minister Nirmala Sitharaman on Wednesday.

This letter has been written 11 days after last Council meeting when Mitra termed the GST Council’s move to retain tax levies on Covid relief materials as a “totally anti-people decision” that was “thrust” upon members. He also accused the Union Finance Ministry of muzzling his voice in the Council.

Never stifled dissent: Govt

However, Minister of State for Finance Anurag Singh Thakur responded that the finance minister has never stifled dissent in the GST Council. “It is unbecoming of a senior member of the Council to suggest that this has happened. The GST Council embodies the collective spirit of all States towards debate in a healthy manner; it has been and shall continue,” Thakur had said.

However, this did not satisfy Mitra and he said he is writing with great anguish. “What pains me the most is the fact that GST Council meetings have become acrimonious, vexing and almost toxic with erosion of mutual trust that has held fast between States and Centre since the inception of the GST Council,” he said.

He mentioned that States’ own revenues are in dire distress with de-growth of three per cent during FY20-21. The gap between projected revenue and revenue collected had ballooned to over ₹2.75-lakh crore. The actual compensation due to the States for FY 21 has reached ₹74,398 crore. “Fraudulent transactions hit a peak of ₹70,000 crore according to Nandan Nilekani’s presentation to the GST Council,” he said.

‘Course correction’

He recalled past meetings when Chairman yielded to suggestions even from a lone voice from a State and in turn, States yielded to Centre’s proposal despite reservations. He also highlighted how consensus emerged in drafting of law, distribution of tax payers, taxing in territorial water and finally on compensation to States in 2016

Urging the Union Finance Minister to introspect on the issues raised, He said: “You may consider a course correction in the manner of functioning of the GST Council. I assure that we will respond in equal measure if you bring back a consensual atmosphere that had defined the GST Council since its inception,” he said.

Published on June 23, 2021

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