High-handedness of Union with States continues?

“GoI-led the anti-people move & imposed GST on vaccine, mask, hand sanitizer, oxygen, PPE, oximeter, COVID-19 test kit, Remdesivir, RT PCR machine. Since my voice ignored, I have recorded my dissent by letter. Unprecedented. Slow death of the only body of cooperative federalism,” Mitra said.

By Vrinda Lobo

A rather stormy GST Council meeting took place on Saturday, to discuss the GST on COVID-19 essentials. After the meeting, West Bengal Finance Minister Amit Mitra tweeted allegations that during the meeting his voice was muzzled, and he could not share his objections.

The GST Council meeting was much anticipated by the states. The last time the GST Council came together was nearly six months ago. Independently, the states urged the Central Government for the GST Council to meet. There have been devastating stories of loss of human life during the second wave of COVID-19, and the economic impact would be seen in the coming months. In the GST Council meeting, the states planned to discuss the strategies for tweaking the tax policies that can help the nation combat the catastrophic COVID-19 pandemic.

Unfortunately, it seems not all participants were able to put forth suggestions at the GST Council meeting. Amit Mitra accuses the Union Ministry of muzzling his voice and cutting off the virtual conference link when he was trying to voice objections.

Later in the evening Mitra tweeted, “I tried my best to repeatedly raise my objection after your announcing this decision, but unfortunately, I was never given the floor and my voice was muzzled, as the Secretary brought the meeting to a close and the virtual link was cut off. Whither GST Council!”

“GoI-led the anti-people move & imposed GST on vaccine, mask, hand sanitizer, oxygen, PPE, oximeter, COVID-19 test kit, Remdesivir, RT PCR machine. Since my voice ignored, I have recorded my dissent by letter. Unprecedented. Slow death of the only body of cooperative federalism,” Mitra said.

Mitra had suggested zero rating or 0.1 percent GST on COVID-19 essentials. The method to zero-rate such supplies where there is no tax payable on the output side and full input tax credits are available of the tax paid on inputs, input services and capital goods used for supply of goods/services. This completely nullifies the cascading effect.

Typically, export of goods/services are zero-rated where an exporter gets a refund of the input taxes paid, subject, of course, to fulfilling of various conditions. We find many examples across the globe where domestic supplies (including imports) have been zero –rated to make the prices affordable to end-consumers.

Implementing such unprecedented measures in this extraordinary time could provide relief in these painful times. It would take off an additional burden from families of patients battling for their lives. Nothing is more precious than saving human lives.

The council decided to reduce the GST rate on a host of medical equipment and goods from 12 per cent to 5 per cent while bringing the duty level to nil for medicines used for the treatment of black fungus.

Non-BJP-ruled states allege that their proposals for zero-rating or reducing GST rates to 0.1% on critical supplies were ignored by the Union Finance Ministry at what turned out to be another stormy Council meeting. They registered a strong dissent, terming the continued imposition of GST on critical COVID-19 supplies and drugs as ‘insensitive’ and ‘totally anti-people’

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