Need for a Serious Midterm Correction in GST.

Introduction:

Punjab FM writes to Union FM Nirmala Sitharaman regarding the need for serious midterm correction in GST. Raises issue of rules surpassing limits of act & need of amnesty scheme

Subject: GST: Need for a Serious Midterm Correction.

Dear Nirmala Sitharaman Jee

“Jai Hind”

I write this letter on the subject of GST when our country is in the middle of battling with the new wave of Covid which is more devastating in many ways than the one before.

I have been particularly persuaded to write this letter because there has been no meeting of the GST Council for the last six months even though the Council’s own Rules drafted in terms of Article 279A of the Constitution of India provide for holding at least one meeting every quarter.

GST revenues constitute nearly 50% of the tax revenues of the States while this percentage for Centre is nearly half of that. States have a voting share of 75% in the GST Council. However, failure to hold any constructive consultation with States for so long in such critical times makes me wonder whether the Centre has usurped all the power of States putting the spirit of cooperative federalism- that formed the very foundation of achieving consensus on the epic reform- on the back burner.

This may be further seen in the context of the reluctance of the Central Government to achieve provisions relating to the appointment of a vice-chair from amongst the States under Article 279(3)  and Disputes Settlement Mechanism under Article 279A(11) of the constitution even after 5 years of the constitutional amendment after repeated suggestions from States to operationalize these at the earliest.

A number of provisions have been enacted in recent times through the route of subordinate legislation (Rules) bypassing both the GST Council as well as the legislatures. It is the basic principle of the justice system that the substantive rights of a person cannot be taken away except by a due process of law.