GST council meetings almost toxic; Bengal Minister Amit Mitra writes to Sitharaman

West Bengal Minister Amit Mitra wrote to Union Finance Minister Nirmala Sitharaman stating that GST Council meetings have become "almost toxic" following the degradation of trust between the Centre and states. He alleged that the union government comes to GST council meetings with a "predetermined conclusion" and urged Sitharaman to consider a "course correction" to rebuild faith.

Following a GST council meeting on June 13, Mitra had alleged that his opposition to levying tax on Covid essentials like vaccines, masks, PPE kits and anti-viral drug Remdesivir was not heard, and his voice was muzzled.

"What pains me most is the fact that GST Council meetings have become acrimonious, vexing and almost toxic with erosion of mutual trust that had held fast between state and the Centre since the inception of the GST Council," he said. He further alleged that several have observed a steady breakdown in the spirit of cooperative federalism and a fall in the commitment to work out a consensus at the meetings. Recalling several instances of the past where differences erupted between states and the Union government without any bitterness or antagonism, he said,

"But, now I am afraid that arriving at such a consensus, even for much simpler matters, has become elusive," he said.

Mitra further noted that this is a dangerous time for the GST regime as states are in distress. Furthermore, the gap between projected revenue and collected revenue has risen to Rs 2.75 lakh crore, and the compensations due to the states for 2020-21 has reached Rs 74,398 crores. As per Nandan Nilekani's presentation to the council, fraudulent transactions have hit 70,000 crores.

"An undercurrent has emerged in recent times that while the Chair hears the submissions of all states very patiently, indeed, there is a predetermined conclusion with which the Government of India, aided by top bureaucrats, comes to the GST council meetings," the letter read.

While emphasizing that the issues were brought to Sitharaman's notice with utmost sincerity and the hope that she would seek course correction in the functioning of the council, he said, "I assure you that we will respond in equal measure if you bring back a consensual atmosphere that had defined the GST council since its inception."