Tribune News Service

New Delhi, May 5

Questioning the government for not holding any meeting of the GST Council for the past six months, Finance Minister Manpreet Badal, in a letter to Union Finance Minister Nirmala Sitharaman, has said rule-making by a committee of officials in this vacuum has led to the harassment of law-abiding businessmen who might not have indulged in any misdemeanour at their end.

He also questioned the Centre’s commitment to federalism by usurping the power of states who have a 75 % voting share in the GST Council. The Punjab Finance Minister has sought discussions in the GST Council on several issues in order to make a mid-course correction in the GST system. The central government is also reluctant to appoint a vice-chair from the states and operationalise the Dispute Redressal Mechanism five years after a constitutional amendment.

There was no discussion at all in the GST Council on substantive changes in rules, like restricting tax credits, by a committee of officers (the GST Implementation Committee) that was actually meant for mundane matters. Without political oversight, the harassment of tax-payers has taken an entirely new dimension. “For example I fail to see any reason to demand GST from a recipient in a long supply- chain for a possible sin committed by someone with no connection whatsoever with the recipient,” he wrote.

The Punjab Finance Minister also sought transparency in GST data because there is little information as to whether the revenue inflow during a month relates mostly to the preceding month or are arrears.

The GST Council, he wrote, should discuss whether GST should be exempted on Covid-related items, if interest rates under GST law should be on a par with the market interest rate and relief to most-impacted sectors such as aviation, hotels, commercial reality and retail. The GST Council also needs to discuss whether there should be amendments to allow donations of Covid goods without denying tax credits on inputs.