Ruchika M. Khanna
Tribune News Service
Chandigarh, May 25

Punjab Finance Minister Manpreet Singh Badal has taken a strong exception to the agenda issued for the GST Council meeting scheduled for later this week, which has failed to take into account the ravaging pandemic. Calling the agenda for the meeting “mundane and not dealing with any of the substantive issues that confront us”, he has demanded that all aberrations and distortions that have crept into GST, must be overcome.

In a letter to Union Finance Minister Nirmala Sitharaman, Badal has also sought to remove all anomalies in the remaining compensation period of one year, besides demanding GST tax cuts on essential Covid supplies. The meeting is scheduled for May 28, and is being held after a gap of seven months.

Highlighting the high taxation on the goods and equipment required to fight Covid-19 and as the Pandemic ravages Punjab, which has the highest case fatality ratio (CFR), Badal has demanded that Basic Customs Duty and GST be slashed.

“Many goods suffer BCD ranging up to 20 percent and GST up to 18 percent, besides a social welfare surcharge of 10 percent and IGST of 2-3 percent on taxable value…. It is baffling that despite the crisis that our country currently finds itself in, with millions of people suffering the consequences of Covid and inadequate health infrastructure, high taxes continue to be applied on basic essentials needed to overcome this life-threatening disease,” he has written in the letter.

It may be mentioned that GST of 18 percent is applicable on protective garments, digital thermometers, lab sanitisers, disinfectants, paper bed sheets etc ; between 12- 18 percent on medicines like Remdesivir, Doxycycline, Ivermectin and Tocilizumab; and 12 percent on Covid test kits, vaccines, ventilators medical oxygen and nebulisers.

He has also taken strong exception to excessive delegation of powers to officers, bypassing the sanctity and constitutional mandate of GST Council. “Decisions have been taken by the GST implementation Committee, and these are on the agenda for the information of the Council, and not for their approval. It is unprecedented … the Council has been reduced to a mere bystander. There is need to strengthen the federal structure and have effective consultation with states,” he has demanded.

Badal has demanded a structural reform of GST, mainly by reviewing and harmonising tax rates and exemptions to eliminate opportunities of exemptions and reducing the burden of tax compliance and plugging tax leakages. “I had hoped that GST will provide the foundation for strong and vibrant India. Punjab went ahead with grave risks to its revenue, agreeing to subsume purchase tax in GST. Our fears were not unfounded as have been proven with somewhat dubious distinction of topping the states with highest shortfall… we will grapple with the deficit as best as we can, we don’t wish to see our sacrifices go waste for the nation,” he has said.