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Why has GST Council not met for 6 months?

Our Bureau New Delhi | Updated on May 05, 2021

Punjab Finance Minister Manpreet Singh Bada

Badal urges Union Finance Minister to convene meeting as critical issues hang fire

Punjab Finance Minister Manpreet Singh Badal has asked Union Finance Minister Nirmala Sitharaman to convene a meeting of the GST Council to discuss key issues including essential medicines and equipment for Covid-19 treatment being stuck in ports and airports.

Talking to the reporters, he said the Governments have to more nimble. “Aid is needed and it is urgent,” he said.

Badal said in a letter to the Finance Minister that  the GST Council had not met in the last six months even though Council’s own rules provide for holding at least one meeting every quarter. “However, failure to hold any constructive consultation with States for so long in such critical times makes me wonder whether Centre has usurped all the power of States putting the spirit of cooperative federalism- that formed the very foundation of achieving consensus on the epic reform on the back burner,” Badal charged.

 

‘No vice-chair yet’

He said the Centre has been reluctant to activate provisions relating to the appointment of a vice-chair from amongst the States under Art 279A (3) and Dispute Settlement Mechanism under Art 279A (11) of the Constitution even after five years of the constitutional amendment. “A number of provisions have been enacted in recent times through the route of subordinate legislation (Rules) bypassing both the GST Council as well as the legislatures. It is the basic principle of justice system that substantive rights of a person cannot be taken away except by a due process of law. The recent amendments in GST Rules (like restricting tax credits) have far reaching implications and were made without even of an iota of discussion in the Council. The delegation of authority provided to a Committee of Officers (GST Implementation Committee) was meant for mundane matters while the same is being misused to carry out substantive changes,” Badal charged.

‘Harsh action’

He alleged oversight has been given a go-by with harassment of tax-payers  as officials resort to threats of arrest, provisional attachment of productive assets and freezing of bank accounts.

He said GST data provides perhaps the best glimpse of the state of the economy. “While the revenue collections for the last few months have shown some uptick there is little information as to whether the revenues during a month relate substantially to the  preceding month or are arrears accumulated over a long period of time. Thus we need to know GST revenue for the month based on tax returns filed. This will help in understanding the true revenue trends and the state of the economy for suitable corrective action,” he added in the letter.

He said issues such as GST exemption on hand sanitisers, face masks, gloves, PPE Kits, temperature scanners, oximeters, ventilators and the like should be discussed, as also problems of access to officials,  and relief to sectors such as MSMES, aviation, hotels, restaurants, entertainment, commercial reality and retail.

“The promise of assured compensation does provide a ready catalyst for such a mid-course correction for some more time. The clock is sure ticking. India eagerly awaits the GST we all dreamt,” he said.

Published on May 05, 2021

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