June 24, 2021 5:30:23 am
West Bengal Finance Minister Amit Mitra wrote to his central counterpart Nirmala Sitharaman again on Wednesday, seeking a course correction by the Goods and Services Tax (GST) Council to restore consensus-based approach in decision making.
Mitra expressed concern that the meetings of GST Council — the only federal body with law making and taxation powers — has almost become ‘toxic’.
He wrote, “What pains me the most is the fact that the GST council meetings have become acrimonious, vexing and almost toxic with the erosion of mutual trust that had held fast between states and the Centre since the inception of the GST council.”
He also cited instances from the past where the central government and states accepted each others’ suggestions on important issues such as setting the threshold for GST registration.
He said, “I recall many instances when GoI (the chair) yielded to suggestions even from a lone voice from a state and in turn, the state yielded to GoI proposals despite reservations. The council vehemently debated over thousands of pages to formulate the GST law, IGST law and GST compensation law without any bitterness of antagonism. I recall that the possibility of consensus almost broke down over how tax payers would be divided between the Centre and States (vertical or horizontal formula) ending with a consensus on a 1.5 crore threshold, as proposed by states. But now I am afraid that arriving at such consensus even for much simpler matters has become elusive.”
At the end of his letter, Mitra said, “I urge you Honourable Minister to kindly introspect on what I have taken the liberty of bringing to your attention with utmost sincerity and frankness, so that you may consider a course correction in the matter of functioning of the GST Council.”
He wrote, “Frankly speaking, Honourable Minister, an undercurrent has emerged in recent times that while the Chair hears the submissions of all states patiently, indeed, there is a pre-determined conclusion with which government of India, aided by its top bureaucrats, comes to the GST Council meetings.”
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