CHENNAI: Renewing his criticism of the GST and its implementation by the union government, TN Finance and Human Resources Minister Palanivel Thiaga Rajan on Thursday said there were appalling weaknesses in the implementation of the taxation.
Speaking at the first national symposium for GST officers organised by the Institute of Chartered Accountants of India (ICAI), he alleged that Integrated GST (IGST) revenue-sharing methodology was not transparent.
“At best I can tell, nobody in this country can explain how the IGST revenues are shared among the states. For the first two years, the money was not split at all. (It was) about Rs 89,000 crore.” The minister said a mechanism to split the funds were introduced only after the Comptroller and Auditor General of India flagged it. “I have worked with our commercial tax dept for a year and a half, but I cannot figure out a methodology that will arrive at this outcome.”
Calling the revenue sharing model as a black-box system, he said it lacked respect and trust because nobody knew how the system worked and there was no rationale behind this. The finance minister, a former banker, said the fitment committee and law committees of the GST council were not properly designed and decisions were taken arbitrarily by members of a few states.
He said the Group of Ministers (GoM), with elected representatives, used to work more efficiently but it had been politicised now. In the times of former union finance minister the late Arun Jaitely, whichever state that had the interest or priority in the topic for discussion was asked to be the convenor. Now, however, this is based on seniority, making GoM an inefficient system, he said.
“GST council in its entirety has become a rubber stamp because the bulk of the work has been done either by the fitment committee or by the law committee or GoMs,” he said. CA Rajendra Kumar P, Chairman of GST and Indirect Taxes Committee; CA Umesh Sharma, Vice Chairman of GST and Indirect Tax Committee; GST commissioners and senior officials were present.