The dwindling goods and services tax (GST) collections, which fell to a 19-month low in September, have triggered a war of words between Kerala Finance Minister Thomas Isaac and the Union finance ministry.
“What compliance can you expect when even the first annual returns are yet to be filed? And also, rates have been continuously slashed to less than revenue-neutral levels,” he had tweeted.
Meanwhile, Punjab Finance Minister Manpreet Singh Badal on Thursday called for a fresh look at the GST structure, saying the current system has failed.
“Punjab has been consistently opposing the design of the current GST. It is actually a badly designed GST,” he told reporters on the sidelines of the India Economic Summit.
Sources in the union finance ministry, however, said states had a greater role in administration of the GST, given the reach of their tax officers.
To emphasise on their point, they cited statistics stating that Kerala saw 63 per cent returns filing in July, against the national average of 68 per cent.
It also may be noted that even during the period May-Aug 2019, when GST revenues witnessed less-than-expected growth at 5 per cent, the tax on domestic inter- and intra-state supplies saw growth of 9 per cent, which has been pulled down by the fall in GST on imports by 4 per cent.
“Therefore, the comment of the finance minister of Kerala does not appreciate all the facts that are affecting GST revenues today or in the past,” one of the people said.