Indian States Raise Voice to Fill GST Council Vice-Chairman Post

GST Council will conduct a meeting this month, it is expected to be focused on Compensation to States but it is also set to air concerns of inadequate representation and review of the indirect tax regime These types of taxes paid on Consumption by the consumer but they do not pay directly to the government (unlike income tax). For example, GST, Sales Tax, VAT, Custom Duty and Octroi Tax. As per GST Act States’ will get compensation at an annual growth rate of 14% for any revenue loss from the base Financial Year which was 2015-16.

As per the recent update, most of the Opposition-ruled states such as Kerala, Punjab, and Chhattisgarh can emphasize the Council to fill the post of Vice-Chairman immediately. Additionally, they can insist to fill this vacant post by allotting it to a finance minister from a non-BJP ruled state. The post of Vice-Chairman has been remained vacant since the Introduction of the GST regime it means since July 2017. The Council is lead by the Union Finance Minister Nirmala Sitharaman.

Manpreet Singh Badal, Finance Minister of Punjab said that “designating a state FM to the Vice-Chairman’s post was essential to bring states on an even keel with the Centre. ‘Many issues need to be looked into under GST. The post of Vice-Chairman in the GST Council also needs to be filled since otherwise there is no adequate representation of states’ agenda in the secretariat. Right now, it’s mostly run by the Government of India. It should have been operationalized three years back'”.

TS Singh Deo, who is the Health Minister of Chhattisgarh and represents the state in the Council, said although the Vice-Chairman doesn’t have additional powers as such, the move would be welcome “as a federal gesture and as a measure of inclusiveness”. “States feel their views are not getting adequate representation and the tendency to take things into a Central perspective; it is objectionable also because it impinges on the federal structure. So, any time is the right time”.

As we said earlier the meeting will be mainly focused on the options to give compensation amount to state and there are some option council is looking at. The first one if borrowing from the market, the second one is the hike GST rate Grab the information of revised GST slab rates on consumer products in India, Although GST council finalized the slab rates like 5%, 12%, 18% and 28% but the hike is not a good idea amid an economic slowdown.

As per the received update, no states including the BJP-Ruled states are willing to accept a lower than 14% rate. Manpreet Singh Badal said that You can increase the rates, but it’s not feasible now. The Centre can borrow and give to states, but the central government may not want to increase its fiscal deficit. The only option is to empower the Council to borrow”.