A schism of the GST Council
Bengal’s Mitra describes it as ‘authoritarian,’ while Punjab’s FM wants a dispute settlement body. The Goods and Services Tax, aka GST Council, is baffled earlier used to make firm consensus decisions.
As opined by west Bengal’s and Punjab’s finance minister, Amit Mitra and Manpreet Singh Badal– have criticised the GST Council’s working style, exposing the divide in the Centre-state group. The GST Council held a meeting last Saturday to discuss temporary tax breaks for a clutch of Covid-19 supplies keeping in mind that the tax rate would be 5%.
In a series of tweets on Saturday, Badal restated the demand for ‘zero-rating of Covid medications, vaccines, and supplies’ and labelled it ‘preposterous’ to remove the Congress party from the relevant group of ministers (GoM) and asked for operationalisation. (The board of directors) is mutually agreed to a certain extent which is breaking down presently,” he said.
The issue on which we need to reach an agreement is that the as you did with three farm act; the same should be done with this amendment related to Covis-19 supplies as well,” Mitra stated during a virtual press conference.
The Centre has long believed that zero-rating vaccines are unnecessary because individuals can get free through government channels. According to the Centre, a nil tax rate is incompatible with the GST system, which is based on a continuous value chain till the retailer. It receives its strength from a seamless input tax credit mechanism.
West Bengal finance minister Amit Mitra, who has been vocal in his opposition to the way the GST Council has been making decisions recently, reiterated his demand on Monday that Covid-19 medicines, vaccines, and materials for zero-rating or a nominal 0.1% GST rate to combat the pandemic. The council and GoM have implemented the ‘majoritarian’ and ‘authoritarian strategy.
Mitra stated that Union Finance Minister Nirmala Sitharaman had not yet responded to his letter. He stated that states would require an additional GST compensation of around Rs 63,000 crore for the fiscal year 2020-21.