Cabinet Minister Singhdeo writes to Union Finance Minister suggesting measures for upcoming GST Council meeting

Raipur:The GST Minister of Chhattisgarh, T S Singhdeo, has written a letter to Union Finance Minister Nirmala Sitharaman expressing his views on the upcoming GST Council meeting. Singhdeo said in the letter that he was eagerly awaiting this GST Council meeting held on June 25, but he could not attend it after being infected by Covid-19. Singhdeo made a humble appeal to the Union Finance Minister through the letter to allow this letter to be placed before the GST Council and the suggestions be taken in the record of this meeting.

Singhdeo has further written that the provision of 14% protected revenue will end from June 30, 2022. This should be continued for at least 5 years, because especially the mining and manufacturing states, which are not consumers, lose a lot of revenue. Singhdeo has underlined the following difference of VAT and GST while presenting the details of 10 items.

*Iron and Steel (VAT 1600Cr – GST 350Cr)-Difference 1250Cr

*Coal (VAT 800Cr – GST 200Cr)-Difference 600Cr

*Paddy (VAT 590Cr – GST 0Cr)-Difference 590Cr

*Tendu Leaves (VAT 110Cr – GST 10Cr)-Difference 100Cr

*Aluminum (VAT 19Cr – GST 5Cr)-Difference 14Cr

*Liquor (VAT 18Cr – GST 0Cr)-Difference 18Cr

*Grocery (VAT 15Cr – GST 25Cr)-Difference 10Cr

*Timber (VAT 15Cr – GST 20Cr)-Difference 5Cr

*Edible Oil (VAT 55Cr – GST 12Cr)-Difference 43Cr

*Tractor (VAT 25Cr – GST 12Cr)-Difference 13Cr

Singhdeo said the state suffered a huge revenue loss of Rs 2,786 crore in the financial year 2018-19, Rs 3,176 crore in 2019-20, Rs 3,620 crore in 2020-21 and Rs 4,127 crore in 2021-22under the GST, which was provided to pay compensation through the provision of cess.

“If we are to function as an effective federal unit of India, it will be impossible to bear such revenue loss. We are presenting a proposal in the GST Council to continue with the 14% protected revenue provision,” said Singhdeo in the letter.

If the protective revenue provision is not continued, the 50% formula for CGST and SGST should be changed to SGST 80-70% and CGST 20-30%.

Singhdeo further cited a Supreme Court judgment regarding the nature, power and scope of the GST Council that unless we as its member in the GST Council, unilaterally every State and Center ensure financial stability through rational revenue realisation, the concept for which the GST Council was made may seem untenable.