T.N. Finance Minister to write to GST Council

Tamil Nadu Finance Minister Palanivel Thiaga Rajan on Tuesday told the Assembly that he would write to the Centre, the Union Finance Ministry and the GST Council to come out with a clear statement to put an end to the rumours that there was a proposal to increase the GST rates.

“I will write it in a day or two and I do not have any other information,” he said, responding to PMK floor leader G.K. Mani, who raised concern over the reports that the GST rates could be increased.

The Minister said the GST compensation period of five years was coming to an end in June this year, and Chief Minister M.K. Stalin had sought an extension when he met Union Finance Minister Nirmala Sitharaman. The Chief Minister had also written to Prime Minister Narendra Modi on this issue.

Mr. Palanivel Thiaga Rajan called for toning up the functioning of the GST Council. “The compensation period is going to end in June 30. As of now, we do not have information from the Union government whether the period would be extended, and due to this, the revenue of each State would decrease by several thousand crores of rupees.”

Pointing out that Prime Minister Narendra Modi had opposed the GST when he was the Gujarat Chief Minister and former Chief Minister Jayalalithaa was also against it, Mr. Palanivel Thiaga Rajan said the effective tax rate, which was 15% of the indirect tax when the States had separate sales tax and VAT, came down to 11.4% when the GST was introduced.

He said there were two flaws in the GST when it was framed, and tax revenue had not increased as expected even after five years.


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