There is an urgent need to call a meeting of the GST Council, especially with the brutal second wave that is likely to severely hit the economy, West Bengal Finance Minister Amit Mitra said in a letter to Union Finance Minister Nirmala Sitharaman on Thursday. The council has not met since the virtual meeting it held in October last year.
Mr. Mitra is the second State Finance Minister to raise the issue in the 10 ten days. In a letter to Ms. Sitharaman, Punjab Finance Minister Manpreet Singh Badal made a similar demand on May 5.
Mr. Mitra reminded Ms. Sitharaman that the rules dictate that the Council must meet once every quarter of the financial year. “You would agree that not meeting every quarter to discuss vital issues is not in line with the very principle of cooperative federalism,” he said.
The alarming shortfall that is expected in the compensation to the States needs to be discussed urgently, Mr. Mitra wrote.
As per the government of India’s projection, the shortfall was expected to be to the tune of ₹1,56,164 crore in 2021-22, without taking into consideration the impact of COVID second wave.
“Now, due to COVID wave-2 and lockdowns, the compensation will be much higher than what was projected earlier. This is undoubtedly deeply distressing,” he said.
GST revenues constitute nearly 50% of the State government’s revenue. With the States being the majority stakeholder in the GST Council, they hold the deciding power. Mr. Badal had earlier pointed out that the committee of officers or GST implementation committee was formed only for mundane matters, but in the absence of the Council’s meeting, it is bringing about substantive changes without consulting States.
The Opposition parties, including the Congress, have also been demanding that GST be waived off on key medical items required to fight the COVID pandemic.