Alleging that the Goods and Services Tax (GST) Council is functioning as an omnipotent authority with a majoritarian approach, state finance minister Amit Mitra today said that bureaucrats have taken over key committees thereby undermining the powers of the elected members of the Council.
Mr Mitra complained that even the voice of the Group of Ministers in the council is being silenced.
Addressing a virtual press conference, Mr Mitra said that states gave up 70 per cent of their taxation rights to embrace GST as consensus was the approach for decision making earlier but this has now shifted to an authoritarian approach. “There is a dramatic shift from consensus mechanism to authoritarian and majoritarian approach in the GST Council,” he said adding: “It destroys the only federal institution in the country.”
Mr Mitra demanded a probe into how and who had “muted” his microphone when the 44th GST Council meeting was in progress on Saturday. He said that he had tried his best to “raise objections” during the meeting but the virtual link was snapped at a “critical time”. He said that he had written a letter to Union Finance Minister Nirmala Sitharaman to record his dissent but has received no reply though he shares a “very cordial relationship” with her.
“My microphone was muted and I could see it… I am not a fool. Please investigate and let me know. Why was my microphone muted at a critical time when I wanted to put across my dissent? I am giving the benefit of doubt,” he said.
Deliberating on the decision-making tendency of bureaucrats and passing those on to the Council members, Mr Mitra said that GST implementation committee comprising a panel of officials to take care of procedural matters is now amending important rules which are only placed before the Council for reporting purposes not for ratification.
Also, the fitment committee of officials which recommends tax rate changes sends detailed proposals just prior to the Council meeting which leaves ministers with little time to examine them, he added.
Further, he said that the states revenues have dipped by three per cent and hence they should be compensated by an additional Rs 63,000 crores, of which West Bengal is entitled to get Rs 4911 crore. The earlier compensation calculations were based on much more optimistic assumptions.
Mr Mitra, who demanded for a full tax waiver on Covid-related medical supplies, said his demand for zero GST rate or a token 0.1 per cent would have enabled tax reduction to consumers as well as availability of tax credits to producers was ignored. Similar demand was raised by other opposition ruled states like Kerala and Punjab. The Council, however, preferred to keep most of the items at 5 per cent rate.
On Saturday, the Centre had announced reduction of taxes on several medical supplies, including oxygen, ventilators and testing kits from 12 to 5 per cent, ambulances from 28 to 12 per cent, furnaces for crematoriums from 18 to 5 per cent and two drugs from 5 per cent to zero.