Oppn-ruled states, Centre slug it out over GST mop-up

NEW DELHI: Lower-than-budgeted GST collections over the past few months has triggered a slugfest between the opposition-ruled states blaming repeated reduction in rates and weak compliance for it, prompting the Centre to hit back and dismiss the allegations, while maintaining that the GST Council has been unanimous in deciding on all issues including, the levy.
On Thursday, Punjab finance minister Manpreet Badal sought a fresh look at the GST structure saying the current mechanism was not working and was joined by his boss Amrinder Singh and Madhya Pradesh chief minister Kamal Nath, who also complained of delay in payments.
“GST council consists of states. The states are falling in line with the central government because they may be run by one party. If they are few states and rest are being run by one party then they come to sign on dotted lines. It is pre-determined. There is no engagement. There is no intellectual understanding of the situation. It's all in theories. All on paper. We must recognise and we cannot shut our eyes to this,” Nath said at a conference, adding that there have been a series of amendments.
The statements came two days after Kerala FM Thomas Isaac, who regularly differs with the Centre’s views, tweeted: “Record low GST collection is not only a reflection of economic slowdown but also the mess in GST administration. What compliance can you expect when even first annual return is yet to be filed? And also rates have been continuously slashed to less than revenue neutral levels.”
While the finance ministry has so far refused to comment on the issue, sources said that all the states have been involved with the process at every level. For instance, Kerala is part of the Fitment Committee, which recommends rate changes, as well as the IT panel. Similarly, Punjab is part of the Law Committee as well as the Fitment Committee.
Sources explained that many of the proposals come from states as the businesses approach the state governments, which take up the issue with the Fitment Committee and based on the recommendations this panel, the GST Council, comprising state and union FMs, takes a final decision.
Further, they said that the slowdown in collections is a phenomenon seen in the last few months, with the growth rate moderating to 4.9% during the first half. In contrast, most of the decisions to reduce the levies were taken during 2018 when revenue was growing at 14%. “The rate rationalisation approach of GST has been extremely calibrated and in line with the philosophy to keep a few items in the top bracket of 28% and move more goods to the 18% slab,” said a source.
Countering the Opposition’s charge of poor administration sources said that states have a bigger role to play to ensure compliance. While the compliance level had increased nationally, states like Kerala were reporting lower filing.
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References

1. ^{^} Amrinder Singh (timesofindia.indiatimes.com)
2. ^{^} Madhya Pradesh (timesofindia.indiatimes.com)
3. ^{^} Kamal Nath (timesofindia.indiatimes.com)
4. ^{^} Kerala (timesofindia.indiatimes.com)

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