CHENNAI: Tamil Nadu Finance Minister Palanivel Thiagarajan on Saturday expressed concern over the unduly long discussions happening on granting tax exemption for life-saving drugs and equipment for Covid patients. Tamil Nadu and many other States had sought this concession for a short period of time to make them available at reduced prices.
Briefing reporters at the Secretariat about the 43rd GST Council meeting that happened on Friday, the minister said, “It is inhumane to levy tax on life-saving drugs and equipment during a pandemic. The zero rating GST for these items would come to a few thousand crores at the national level. I wonder why the government cannot give up this nominal amount for the sake of the poor.” Thiagarajan took a dig at the Central government, saying, “If the government has to survive on the GST collected for these drugs, I would say the government is inefficient.”
Explaining what happened at the meeting, the minister said, “The demand for zero rating GST for Covid medicines was countered saying that there was no rule in the GST Code to provide for that. “However, Finance Ministers of many States pointed out that there indeed was a clause dealing with this. Either zero rating can be done or it can be fixed at 0.1 per cent. But after this was pointed out, the Council argued that there would be a slide in revenue if it was allowed,” he added.
He heavily criticised the ‘One State, One Vote’ formula (with no consideration of either population, or GSDP, or proportion of national production or consumption) for the GST Council, since this arrangement perpetuates injustice against larger, well-developed States in multiple ways.
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"There are fairer and more just ways to allocate votes in the Council, with voting rights in proportion to membership in the Rajya Sabha as an immediate, more equitable, alternative. There is a fundamental mistake in allotting one vote per State," he added.
He stated that the structural design of the GST system has ingrained flaws, which have been revealed and exacerbated by problems of execution. "We have arrived at a juncture when profound, root and branch reform of the notion of GST is the calling of the hour. Not undertaking such an effort now, will put its very future at grave risk," he underscored.