Uproar over changes in last meeting's minutes

The issue: changes in provision for states dealing separately with Centre on cross-empowerment

A number of states on Saturday alleged misrepresentation in the minutes of the ninth meeting of the Goods and Services Tax (GST) Council. The 10th meeting of the Council was held in Udaipur. Representatives of some of the states attending the meeting said there was an uproar because of changes in the provision for individual states dealing separately with the Centre on cross-empowerment. And, for the first time, there were alleged deletions of entire passages in the minutes of the previous meeting that took place in mid-January. There were also, apparently, minutes on three issues that had not been discussed at all. The ninth meeting had locked down on the issue of dual control.

The decision was that assessees with annual income of up to Rs 1.5 crore would be shared on 90:10 ratio between the Centre and states; and those earning more than this would be divided 50:50. However, sources, who did not want to be named, told Business Standard the minutes of the ninth meeting, which they perused, were somewhat different.

It had a provision for states to renegotiate the provisions already agreed upon with the Centre.

It also stated new businesses with annual income below Rs 1.5 crore would also be shared 50:50 with states; and import and export businesses would be under the jurisdiction of the Centre. These three had not even been discussed in the last meeting, said sources.

“In the first two and a half hours of the meeting, there was uproar over this as some states vehemently opposed these additions. Delhi, West Bengal, Kerala and Karnataka were most vocal,” said a top representative of a state.

Even some Bharatiya Janata Party-ruled states were opposed to these.

After the central revenue department officials, who had drafted the minutes, came under fire from states, the three provisions were deleted, sources said. “In the 10 meetings of the GST Council, it has never happened before that portions of minutes of a meeting have been deleted,” the source said.

“The central tax officers were pulled up. They were told if they cannot make the minutes properly, they should take help of state officials, which is embarrassing for them. Revenue officials should be neutral and should not take the Centre’s side.”

“One BJP-ruled state had said in the last meeting that they don’t want control over small businesses with annual income of Rs 1.5 crore. Almost everybody opposed this in today’s (Saturday’s) meeting. The Centre wants to keep this open so that later they can exert pressure through tax officials and the Central Board of Investigation, and ask other states to also give up their powers,” the source said.