GST Council becoming authoritarian and majoritarian: Bengal FM Amit Mitra

After registering dissent over the GST Council decisions on Covid-related materials, West Bengal Finance Minister, Amit Mitra,on Monday said that the Council was moving away from a consensus-based approach and slipping into an authoritarian and majoritarian approach.

Citing several examples of a “dramatic shift”, Mitra said that the GST Council was the only federalist institution, but in the last few years, an omnipotent, authoritarian and majoritarian approach was creeping into the GST Council.

One of the instances that Mitra pointed out related to borrowing to meet compensation shortfall of states. “We had said that the Centre should borrow from its special window of the Reserve Bank of India (RBI). But despite long sittings in the 42nd meeting of the GST Council, no decision was made,” he said.

But when the RBI suggested the same, the Union government accepted, he pointed out. “The decision was made outside the council. This undermines the credibility of the GST Council,” added Mitra. 

Mitra’s comments came after his letter to Union Finance Minister, Nirmala Sitharaman, expressing anguish, shortly after the “single agenda” GST Council meet on Covid-related materials held on Saturday.

He mentioned in the letter that his voice was “muzzled” and some of his comments were deleted as sought by the minister from UP.

Union Minister of State for Finance & Corporate Affairs, Anurag Thakur, however, had commented on Saturday itself and said that it seemed as if the Finance Minister from West Bengal did not have a stable VC connection.

Mitra today said that microphones were controlled by central government establishments and asked to investigate why he was muted at a critical time when he was going to put forward his dissent.

Mitra had proposed a zero-rate for Covid-related materials. Alternatively, he had proposed a 0.1 per cent GST, which was within the power of the GST Council. Eight to nine states had proposed a zero-rate or 0.1 per cent.

However, the Council retained the GST on Covid-19 vaccine at 5 per cent and reduced tax rates on many Covid items from 18 to 5 per cent and from 12 to 5 per cent; on Tocilizumab and Amphotericin B (black fungus medicine), it was slashed to nil.

The decisions were in line with the recommendations by a group of ministers (GoM). The eight-member panel was mandated to examine tax exemption and concessions on Covid items.

However, Mitra pointed out that the GoM decision was not unanimous as Kerala minister had given a letter saying, zero-rating.

Other non-BJP states also expressed angst after the GST Council meeting.

Punjab finance minister, Manpreet Singh Badal, made a series of tweets on submissions before the Council on Saturday and commented: once in a century crisis, GST Council’s GOM should stop acting like a Shahenshah.

Former Kerala Finance Minister, Thomas Isaac, tweeted that it was absolutely shocking that Bengal FM Amit Mitra had to publicly complain that his voice was muzzled, some of his comments deleted and mike switched off in GST Council.

“The Council doesn’t meet for prolonged period. And this is what happens when it meets. Tragic!” he added in the tweet and also said that urgent reforms were needed for GST Council and called for setting up a dispute resolution mechanism.

“Elect a Vice Chairperson for the Council. Create an independent secretariat for the Council. Meetings to be held regularly,” he further tweeted.

Mitra said at the press conference on Monday that according to procedure of conduct of business, the GST Council is supposed to meet every quarter. But after October, for seven months, there was no meeting and there was no intimation to ministers on this.

Mitra also pointed out that the GST implementation committee or GIC formed of officials to decide on procedural issues was amending important rules and they were being brought before the council for information.

On the fitment committee – which looks into tax rate changes – Mitra said, volumes of recommendations were sent to ministers close to the Council meeting leaving little time to evaluate.