GST Scrutiny Row: States To Challenge Provisions


Finance Ministers of Kerala, West Bengal and Chhattisgarh to raise issues at GST council later this month

New Delhi: Later this month Finance Ministers from opposition-led Kerala, West Bengal and Chhattisgarh will challenge several provisions laid out in the 2010 implemented GST policy.

The states at the heart of the attack would like the government to continue a program that ensures compensation from losses incurred in the goods and service tax. The delegation would either like the extension of the program or some equal attempt at simplifying the present structure of the tax reform.

Sources reported that the states may unilaterally apply for revenues from other taxes in an attempt to de-standardize the tax structure if their ideas to reform are not agreed-to.

The states are likely to move in this direction following the supreme court’s decision that GST Council’s resolutions are non-binding.

“This is not an ego tussle between the centre and states,” said Chhattisgarh’s TS Singh Deo.

“The idea is to ensure an increase in revenue and if it doesn’t happen through the council then it will have to be from other avenues. This was supposed to be ‘one nation one tax’ and not ‘one nation one budget.'”

Under the GST reform, the centre will have to recompense the states for five financial years from June 22 for admitting to the centre their tax-making agencies.

“GST had curtailed the power of states and now this order will give some freedom to states,” said finance minister of Kerala, KN Balagopal. “We would surely press for it in the upcoming GST meeting.” he added.

The states argued that their grievances regarding the revenue losses following the council’s decision or regional tax issues were not taken to discuss during board meetings.

The GST council meetings set to take place later this month will attempt to “negotiate pragmatically” on issues” added Abhishek A Rastogi from Law Firm Khaitan & Co.



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