CHENNAI: Stating that there is no indication from the Union government that the GST compensation period would be extended beyond June as demanded by State governments, Finance Minister Palanivel Thiaga Rajan on Tuesday said he would write to the Union Finance Ministry and GST Council seeking clarification on rumours about possible hike in tax rates.
The minister said this while responding to questions from PMK floor leader GK Mani, ER Eswaran of the KDMK and T Velmurugan of TVK in the Assembly during zero hour. "The Centre and the council have realised that income from GST has been low and this should be set right. There are rumours about possible hike in GST rates, I will be seeking a clear reply to put these rumours to rest," the minister said. If GST compensation period is not extended, States would face revenue loss of thousands of crores of rupees, he said.
"After five years of implementing GST, we didn’t reach expected tax growth.” Also, the growth expected by implementing ‘One Nation One Taxation’ did not happen. Some may blame the pandemic. But even before the pandemic, the issue was clear," the minister said. Rajan also recalled that to address issues faced by the States, two committees were formed after the GST Council in Lucknow.
"One is a standing committee for system reformation and I am one of its members. The second one was the rate rationalisation committee whose objective is to recommend measures for increasing the effective tax rate from 11.4% to 15%. The committee was asked to submit its report to the GST Council within three months but it has not happened.”