Calls for vice chairperson at GST body get louder

Calls from opposition parties are getting louder for appointing a vice chairperson at the Goods and Services Tax Council (GST Council), hinting at the split in the federal indirect tax body along political lines.

CPM leader and former finance minister of Kerala, Thomas Isaac, on Sunday said that urgent reforms were needed in the GST Council. “Set up the dispute resolution mechanism. Elect a vice chairperson for the council. Create an independent secretariat for the council. Meetings to be held regularly,” Isaac said in a tweet.

Isaac’s suggestions echo the demands raised by Punjab finance minister Manpreet Singh Badal a day ago after the council decided to lower the tax rate on many covid-related medical supplies. Opposition leaders pitching for full tax relief on covid-related medical supplies were not satisfied with the reduction of GST to the lowest slab of 5% on several items.

Badal urged the chairperson of the Council, Union finance minister Nirmala Sitharaman, to “operationalize the position of vice-chairperson of the GST Council”. “Further, the GST Council must have its own secretariat, and it should be empowered to adjudicate on a dispute resolution mechanism where there are divergent views,” Badal said in his statement on Saturday.

The demand for a vice chairperson and a dispute resolution mechanism indicate the friction between central and state governments on many issues including the mode and extent of paying GST compensation to states in the wake of a spike in expenditure needs during the pandemic. The Council is set to hold a special session to decide on compensation payment for states’ revenue shortfall in FY22.

However, the dissenting comments that political leaders make outside the council are at times meant for political messaging compared with the measured statements they make in the council. An email sent to the finance ministry seeking comments remained unanswered at the time of publishing.