CHENNAI: Speaking at the almuni meet, Information Technology minister Palanivel Thiaga Rajan said the existing system to measure the goods and services tax (GST) is ‘profoundly flawed’ and can be corrected by 20 different steps without needing any new legislation.
“At every quarter, we used to get this kind of statement from Delhi, we have record GST collections. And every quarter, I used to ask, so what? If GDP keeps going up every year, the total volume of (GST) transactions goes up every year, so the GST collections grow every year. That is just math. Inflation and GDP growth have been built into it,” he said.
The centre should say whether GST collections have gone up as a ratio of economic growth, since growth in absolute values of collections is not a good indicator. “If you (centre) want to say something profound, say, as a percentage of GDP, the GST collections have gone up. As a ratio of relative growth, the number is higher. As compared to the last two quarters, the relative ratio is better. Something must be relative to something. You just say absolute (figures). I say that because, I keep saying that at every chance I get though, I am no longer with the GST council,” he said.
He added that it is important to create right incentives and rewards for the states with right behaviour to address inequality.
(With inputs from agencies)