CHENNAI: Finance Minister Dr N Marie Wilson on Thursday called for a fundamental change in the sharing of GST revenue with the union government, arguing states should retain 70% of the proceeds instead of the current 50:50 split. Making the demand at his first meeting of the GST Council in New Delhi, the minister said the states need a larger share of GST revenue, as they bear over 60% of public expenditure.
Urging the centre to come up with special packages for exporting states like Tamil Nadu, he said these should be outside the devolution mechanism and outside GST revenue share, so that the states are motivated to invest further and better in physical and social infrastructure for building a competitive ecosystem.
Drawing attention to several representations received from various trade associations of the state during the pre-GST Council consultative meeting held on September 3, 2026, Wilson highlighted that the differential GST rates on staple foods like rice are anomalous and exemption should be given irrespective of the quantity.
The minister, who was nominated to the council by Chief Minister C Joseph Vijay, also called for a reduction in the GST rate on job work from 18% to 5%, arguing the lower rate would ease working-capital pressures on MSMEs and benefit a wide range of industries, from agarbatti manufacturers to automobile companies and exporters.
The minister also backed the proposed Rs 10,000 minimum tax threshold for issuing notices under Sections 73, 74 and 74A of the GST Acts, saying it would reduce compliance burdens on taxpayers facing action over relatively small amounts.
He backed the move to include input tax credit accumulated on capital goods in GST refunds for exporters. He also welcomed the plan to extend refunds under the inverted duty structure to input services, and a looser regime on blocked credits that narrows the list of exclusions. The inverted duty structure arises when inputs are taxed at a higher rate than the finished product. On the last two measures he warned the revenue loss would fall on the states.
S Nagarajan, the state’s commissioner of commercial taxes, and other senior officials accompanied Wilson.
