Tamil Nadu Finance Minister Thiagarajan recently attended the 43rd meeting of the Goods and Services Tax Council convened by Union Finance Minister Nirmala Sitharaman. Thiagarajan, who addressed the press the next day, explained emotionally about what he spoke in GST Council. The core of what he said was nothing more than boasting about his expertise. Some false propaganda about his statements are busted here:
Palanivel Thiagarajan (PTR):
Each state has one vote in the GST Council which is not correct. Votes should be allocated to each state depending on its population.
Fact:
The answer lies in the history of the formation of the GST Council. It was during Vajpayee’s tenure as Prime Minister the idea of implementing GST in India was contemplated. The GST law and its structure were drafted by several senior leaders who had served as finance ministers, including West Bengal Finance Minister Asim Dasgupta and Kerala Finance Minister KM Mani.
The GST came into effect with the 101st constitutional amendment. It is a meaningless argument that votes should be cast according to the population of the state. For GST, a national-level taxation system, the state is the basic unit, and the administration of governance is at the state level. In a national-level taxation system like GST, the population of states cannot be used as a metric, just like how the population of districts cannot be used as a metric in a state-level taxation system.
PTR:
Finance Minister of smaller states are given more time than the Finance Minister of the bigger state.
Fact:
Each meeting of the GST Council will be having an agenda, which clearly mentions the matters that need to be discussed and decided at the meeting. State Finance Ministers can make comments, suggestions, objections, and amendments about them. Every state, regardless of its size, population, GDP, or other factors, is given an equal opportunity to speak at the GST Council meeting. The state minister is free to express himself completely.
PTR:
Large states, such as Tamil Nadu, provide India a significant portion of their tax money, which is then allocated to smaller states.
Fact:
States with high GDP contribute higher tax money to the national pool, which is redistributed by the central government to economically backward states, similar to how a person who earns more pays more tax and it is redistributed to persons with relatively low income.
Also, GST revenue is not about production; It depends on consumption. This is the procedure followed not only in India but also in other nations that have implemented GST.
Assume we create 5,000 automobiles, but only a 1000 gets sold within Tamil Nadu due to the size of the market in the state. The rest 4,000 are sold in other states. GST is a tax levied at the place of the final sale. So whichever state has the highest consumption, there will be more tax money.
PTR:
GST council is a ‘rubber stamp’ authority
Fact:
In the GST council, a decision is made with 3/4th or 75 percent of the votes. The central government is given 1/3 of the weightage, or 33 percent, while state governments together are given 2/3 of the weightage or 66 percent. Each state has 2.36% weightage in GST Council.. As a result, 11 states can group together and veto the decision of the central government. However, in today’s scenario, this is not possible because the BJP and its allies rule the majority of states, and so BJP has a majority in the GST Council also.
Political analysts and Tamil Nadu people feel that PTR Thiagarajan, who holds a key ministry, should focus on his work rather than playing petty politics on issues of national importance like GST. His tirades against Sadhguru Jaggi Vasudev, Goa Transport Minister Godinho, Coimbatore South BJP MLA Vanathi Srinivasan, and others have attracted unwarranted controversies at a time when Tamil Nadu is grappling with the second wave of the Wuhan virus.
It would be in Palanivel Thiagarajan’s best interest to focus on what he claims to be good at rather than bullying around on Twitter.
(with inputs from Dinamalar)
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