Tamil Nadu Finance Minister PTR Palanivel Thiaga Rajan on Thursday said the Goods and Services Tax Council has become more of a ‘rubber stamp’ because the bulk of the work is getting done either by the GST fitment committee, law committee, or the Group of Ministers (GOM).

In his chief guest address at the ‘National GST Symposium 2022’ organised by the Institute of Chartered Accountants of India (ICAI), he said there are many glaring weaknesses in the execution of GST. The GST meetings should happen at least once in three months, but in the last five years, that was not the case, he said.

The Tamil Nadu Finance Minister’s remarks come ahead of the 48th GST council meeting, which is scheduled to meet virtually on December 17.

He also said the agenda for GST council meetings, which will see over 30 member states and hundreds of government officials participating, doesn’t come in advance for states to prepare and have intellectual debate.

“I got the second agenda for Saturday’s GST council meeting only yesterday and the third agenda might come by tonight or Friday,” he said.

BLACKBOX SYSTEM

Thiaga Rajan also said nobody in the country could understand the methodology of how the Integrated GST (IGST) is computed and shared with the states. “This blackbox system leads to a lack of respect and trust because nobody knows how this system works.”

The Tamil Nadu Finance Minister also pointed out that very often the outstanding GST amount highlighted by the states and by the Centre differ widely. Giving an example, Thiaga Rajan said, “Suppose, you add up all states’ claims and say ₹60,000 crore of GST is outstanding, the Centre will say the amount due is only about ₹8,000 crore.”

He, however, clarified that both states’ and Centre’s claims are true because the Centre recognises GST dues only after the Comptroller and Auditor General of India (CAG) signs the audit report and submits it to them for that year’s settlement. “There are two years’ worth of settlement still not approved by the CAG office.”

Thiaga Rajan said while the GOMs work much more efficiently with direction and reasonable outcomes, he was not confident about the constitutional standing of the fitment and law committees and whether key tax decisions can be taken by some set of officers of certain states and the Union government.