Tamil Nadu

Panel to study fiscal powers’ distribution

Palanivel Thiaga Rajan.   | Photo Credit: B. Jothi Ramalingam

The Tamil Nadu government is in the process of establishing a council of eminent economists, legal luminaries and scholars to help refine its understanding and positions regarding the social pact between the Union government and the States in terms of the distribution of fiscal powers, Finance Minister Palanivel Thiaga Rajan said at the 45th meeting of the GST Council.

Mr. Rajan, who attended the meeting virtually, said the burden of GST compliance had fallen disproportionately on small taxpayers, in terms of both complexity and technology. Taxpayers, especially small traders, had consistently expressed difficulty in using their accounts on the GSTN portal because all content was only in English, he said.

They were also compelled to avail the services of tax consultants, thus increasing their cost of compliance, while simultaneously denying them complete control over filing of tax returns, he said. “In the four years since the inception of the GST, no substantive efforts have been made with respect to the provision of services in Tamil,” he said.

Citing Item 8 of Annexure-I of the agenda, Mr. Rajan opposed the 18% GST on coconut oil (when packed and sold in a unit container of less than 1,000 ml), classified as hair oil, “irrespective of its actual end use”.

“We find this recommendation to be perverse and lacking in either logic or fairness,” he said, adding that Tamil Nadu was one of the largest producers of coconuts and coconut oil, along with Kerala, Andhra Pradesh and Karnataka.

Pointing out that imported oils, such as palm oil or olive oil, were exempt from import duties, he asked, “Why is a south Indian oil being discriminated against, while oil imported from foreign countries gets the 5% rate in any quantity?”

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Printable version | Oct 20, 2021 8:10:45 PM | https://www.thehindu.com/news/national/tamil-nadu/panel-to-study-fiscal-powers-distribution/article36528029.ece

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