Convene GST Council meet to exempt tax on Covid-19 care material: Punjab govt

Punjab Finance Minister and Congress' senior leader Manpreet Badal wrote a letter to Union Finance Minister Nirmala Sitharaman demanding her to immediately call a GST Council meeting for a mid term correction in tax issues. He suggested a number of issues that needs to be discussed immediately, including the GST exemption on hand sanitizers, face masks, gloves, PPE Kits, temperature check equipment, oximeters, ventilators.

New Delhi: As the entire country is facing a severe crisis of COVID-19 pandemic, Punjab Finance Minister and Congress' senior leader Manpreet Badal, on Wednesday, wrote a letter to Union Finance Minister Nirmala Sitharaman demanding her to immediately call a GST Council meeting for a mid term correction in tax issues.

"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 Council’s own Rules drafted in terms of Article 279A of the Constitution provide for holding at least one meeting every quarter," Badal wrote in his letter.

He asserted that GST revenues constitute nearly 50 percent of the tax revenues of the States while this percentage for Centre is nearly half of that. States have a voting share of 75 percent in the GST Council.

"However failure to hold any constructive consultation with States for so long in such critical times makes me wonder whether 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," the state minister added.

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Raising his concern of non-appointment of vice-chair to the states, he said, "This may be further seen in the context of the reluctance of the Central Government to activate provisions relating to the appointment of a vice-chair from amongst the States under Art 279A (3) and Dispute Settlement Mechanism under Art 279A (11) of the Constitution even after 5 years of the constitutional amendment after repeated suggestions from States to operationalize these at the earliest."

He suggested a number of issues that needs to be discussed immediately, including the GST exemption on hand sanitizers, face masks, gloves, PPE Kits, temperature check equipment, oximeters, ventilators.

He also asked the Government, "With interest rates down by close to 200 basis points, shouldn’t we cut down interest rate under GST law (as also under other tax laws)? With tax-payers’ offices shut and staff working from home, how should the information needs of the department authorities during enquiries be met without physical contact?"

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He added, "How do we provide relief to sectors most impacted by Covid19 e.g. MSMEs, aviation, hotels, restaurants, entertainment, commercial reality, retail? Do we need to make amendment in law to allow donations of goods for Covid19 without denying tax credits on inputs used in their manufacture or purchase? Whether an amnesty scheme is needed to condone delays in payment of taxes during Covid19 period?"

Badal asked the Central Government as how will it reduce litigation in our Courts challenging the vires of the statutory provisions of GST laws.

"I’m informed it is difficult to repair a bad tax system if not done in the formative years. The promise of assured compensation does provide a ready catalyst for such a mid- course correction for some more time," the Congress leader stated.