Amit Mitra, financial advisor and former minister of West Bengal government (file photo).


Describing the future of Goods and Services Tax (GST) as worrying, economist and former West Bengal Finance Minister Amit Mitra said that the environment of the GST Council has become 'toxic'.

Amit Mitra was addressing a national conference on the theme focused on the success of GST at the West Bengal National University of Juridical Sciences (NUJS) in Kolkata.

Mitra explained how the functioning of the GST Council has changed in the five years since the new tax regime came into existence in 2017.

He said, "There was an issue of taxation for 12 km offshore. Eight states ruled by different political parties came together. I remember Nitin Patel, the then Deputy Chief Minister of Gujarat, he came to me and said, Dr Mitra you lead, and I will support you. They were in the BJP. Then you had the BJP, you had the Congress in Karnataka, the CPI(M) in Tamil Nadu, Kerala. All the political parties that ruled the coastal states had common interests. I remember Jaitley took a break. We sat together and said sir, we will not let this pass so that your Center can take over the entire taxation process. Interestingly it was a collegial atmosphere, a There was an atmosphere of consensus.

Mitra said that the then Finance Minister Arun Jaitley agreed and said that he understood the 'House'.

Mitra said that, "He told the central government officials clearly on the face, take it back. It will remain with the states. That atmosphere is gone. Now the atmosphere in the council is of majoritarianism. It started when I was there. In fact, sometimes venomous and sometimes bitter. The saddest part is that sometimes one cannot reach the conclusion."

Mitra argued that the GST Council is the only organization in the country today which is completely federalist.

He said that ministers of 31 states and union territories are part of the council, which is headed by the country's finance minister.

"There is no such institution left in the country," Mitra, financial advisor to the West Bengal government, told a gathering of law students, lawyers and tax practitioners. I am deeply concerned that the old federalism and consensus-building system is fast eroding. .. In the first three years it was entirely based on consensus cutting across party lines."

Mitra also said that the current GST structure is full of fraud.

He said, "Nandan Nilekani made a presentation before the GST Council and what did he find? He found fraud of Rs 70,000 crore till 2020. He divided it into two parts. An additional one is Input Tax Credit fraud, which is around Rs 38,771 crore. was of Rs. How many people did this Input Tax Credit fraud and how did they do it? Create paper companies, do paper transactions and then ask the government to pay you Input Tax Credit. How many people were involved in this? 42,618 cases Rs 38,771 crore fraud only in Input Tax Credit. Under declaration was then another category. How much was that? Rs 31,247 crore. How many people were involved in under declaration? 97,853 cases. So, till 2020 Nilekani's appointment in GST Council Total 70 as per the official presentation, 

Mitra cited the fraud figures after 2020 given by Minister of State for Finance Pankaj Chowdhary in the Rajya Sabha.

He said, "After 2020 we find that the total fraud was Rs 55,575 crore. How many cases? 22,300 cases. I am giving you the exact data. So how much is this total. The total fraud is Rs 1,25,593 crore. This is Nilekani's figure till 2020 and then according to the answer given in the Rajya Sabha, the figure came out. , then this total figure can reach two lakh crore rupees. However, there is no estimate for this.

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