New Delhi: India’s Finance Minister Nirmala Sitharaman on Monday criticized opposition parties for opposing and criticising the goods and services tax (GST) regime, as per a report by Moneycontrol.
“Institution building takes time… to trash it is very easy,” Sitharaman said at a News18 Townhall in Chennai. “Some of us probably will have a greater level of patience, some may not but institutions need patience.”
GST was implemented in India in July 2017. The center’s and states’ respective taxing powers are combined under the indirect tax system.
The constitutional amendment at the time of the GST’s implementation in 2017 allowed for five years of compensation for states’ lost revenue. According to the GST Compensation to States Act, compensation would be released based on an annual growth rate of 14%.
Many states have demanded that the GST compensation, which ended on June 30, continue. The Center has been ambivalent.
Some state finance ministers, most notably Palanivel Thiaga Rajan of Tamil Nadu, have advocated for reforming the tax code. According to PTR, the GST Council must determine whether states should get compensation for any revenue shortfalls if it is to function as a true federal agency. The GST needs to be reviewed as a whole, according to Thiaga Rajan, as its design “left a lot to be desired.”
The GST Council was scheduled to meet in early August after its most recent meeting at the end of June, but that meeting has not yet occurred.
According to Sitharaman, a group of state ministers from different parties led by Asim Dasgupta of West Bengal established the GST. The finance minister responded that the matter had been resolved to some extent when questioned whether Southern states were being discriminated against in the devolution of monies as determined by subsequent finance commissions.
But she also quipped “Will a country prosper if we constantly draw this kind of artificial line?”
