GST Council becoming 'rubber stamp authority' says TN FM Thiagarajan; faces backlash

After making a strong pitch for fiscal federalism, Tamil Nadu Finance Minister Palanivel Thiagarajan or more popularly referred to as PTR recently addressed 43rd meeting of Goods and Services Tax Council on May 29. next day, however, he was faced with a plethora of allegations of being disrespectful to or states and leaders by media. 

PTR, while pointing out that with GST, re is a rise in concentration of powers with Centre, quoted report of 15th Finance Commission and opined new system that is meant to boost GDP and formalisation of ecomy has all but failed to yield productive results. promises made during introduction of new tax system gains has also t materialised, he said.

PTS pushes for an additional vote for bigger states

GST Council which has so far set aside a single vote for each state was quoted as being unfair by PTR. Votes must be cast for each state on basis of population, he claimed.

GST is 101st Amendment to Constitution, which gives Council its approval and vote. PTR's argument that votes should be cast according to population of state can bring forth many administrative challenges, since that is where a state-level taxation system can be administered effectively.

Since re is separate government at district level, MP-constituency level, PTR's claim on having separate tax systems for each state falls flat.
According to his press briefing after council meeting, PTR had claimed that commission allowed State Finance Ministers of smaller states to speak for more time and gave bigger states, less time.

However, GST Councils are organised with a specific nda on what matters need to be discussed and decided at each meeting. State Ministers can state ir views, suggestions, objections and amendments on m. re is restriction on wher one person can talk for more time and ar for less time. latest GST meeting, which went on for eight hours would have given ample time to all leaders with a reasonable point to state.

Palanivel Thiagarajan claimed that large states like Tamil Nadu give away a lot of tax money. Revenue from large production and output states including Tamil Nadu is given to smaller states. However, GST revenue is t about production as it depends on consumption and sale. This is basis t only in India but in all countries of world where GST is in force. For example,if a state produces 5,000 cars. Only 1,000 cars are for sale in Tamil Nadu and remaining 4,000 cars are sold in or states. GST is a tax levied at place of final sale. refore state with highest consumption, re will be more tax returns.

'Rubber-stamp' Council

A n-functioning organisation where an individual cant express ir opinion is called a 'rubber stamp council. So far 43 GST and Council meetings have been held. Various state finance ministers and or ministers have registered strong criticisms and protests on various issues. Council has taken m into account and changed its views and direction. But PTR in his attempts to revolutionise process has ended up disrespecting forum and government effectively, without offering any valuable suggestions.

BJP Minister Vanathi Srinivasan claimed that behaviour of PTR in GST council meeting was an insult to our democracy and tarnishes im of our great state. Verbally abusing Goa’s transport minister does thing to advance TN’s interests, 'he should apologise,' she said.