Oppn-ruled states get Centre to delete 3 GST minutes

In a first, Opposition-ruled states on Saturday got the Centre to delete from the records three minutes of the last GST Council meeting that provided for tweaking of agreed criteria for division of taxpayers under the Goods and Service Tax regime.

The all-powerful GST Council, headed by Union Finance Minister Arun Jaitley and comprising representatives of all states, had in its last meeting on January 16 agreed that 90 per cent of tax assessees below Rs 1.5 crore annual turnover will be assessed by states and the remaining 10 per cent by the Centre.

For taxpayers with over Rs 1.5 crore turnover, the split was 50:50 between the Centre and states.

But the minutes of that meeting, which came up for approval at the 10th GST Council meet in Udaipur on Saturday, gave states the leeway to split the assessees in a different ratio in consultation with the Centre.

This was strongly opposed by Opposition-ruled states like Delhi, West Bengal, Kerala and Karnataka which felt the reported 'minutes of the meeting' do not reflect the decision taken at the GST Council.

This, along with two other minutes, was dropped in the meeting, a minister of an Opposition-ruled state told reporters.

"The 90:10 division (of assessees with turnover below Rs 1.5 crore) and 50:50 (for assessees with over Rs 1.5 crore turnover) was decided but it was not decided that any one state can sit with the Centre and decide to rework (the division) on its own," he said, adding that it was not discussed in the last meeting.

The minister further said that BJP-ruled states had at the last meeting stated that they don't want control over small businesses and the states today said that it shouldn't be made part of the council minutes.

The Centre was originally not in favour of a horizontal split of control of assessees under the dual control or cross empowerment but had to give in to states' demand in the last meeting.

The minister said now the Centre, by tweaking the minutes, was trying to keep the issue open ended "so that later they can exert pressure through taxmen and CBI and ask other states to also give up their powers".

"This is a political gimmick to increase the Centre's powers by turning 90:10 into 50:50. What is the role of the GST council then if the states individually come and decide," he added.

Trinamool Congress-ruled West Bengal, Aam Aadmi Party-governed Delhi, Congress-ruled Karnataka and Left-ruled Kerala were most vocal in their opposition.

"They (these parties) vehemently opposed it," he said claiming that central tax officers were pulled up and told that if they cannot make the minutes of meeting properly they should take the help of state officials.

The minister also said the minutes stated that new registrations of assessees would be divided 50-50 between the Centre and states.

"It wasn't discussed in the last meeting," he added.

Another issue which was contested was on import-export, he said, adding that the Centre had taken the powers to decide in any dispute.

"If goods and services are imported, it is the customs that decides, but in case of exports, states decide. So they wanted to take that power and give them to the Centre," he added.

"We have got the three minutes deleted. It is for the first time ever that this has happened," the minister said.

"The worst part is that since the beginning of the GST council, instead of discussing how to reduce the burden of the taxpayers, we have been talking about how to accommodate tax officials.”

The minister further said the states pulled up central tax officials for being biased towards the Centre while drafting the minutes.

"The central officials were told if they cannot draft the minutes of the council meeting properly, they should take help of state officials," he said. 

Finance Minister Arun Jaitley addressing a press conference at Parliament House after the Goods and Services Tax bill was passed by the Rajya Sabha in New Delhi in August 2016. Photograph: Shirish Shete/PTI Photo.