The state governments of Kerala and Delhi on Tuesday demanded deferment of the Goods and Services Tax Council meeting scheduled for Feb. 20, saying a decision on rates on real estate sector and lottery should not be taken through a video conference meet.
In a letter to Union Finance Minister Arun Jaitley, Delhi Deputy Chief Minister Manish Sisodia said that such “crucial issues” cannot be discussed through a video conference and convening a physical meeting is important to take a consolidated decision.
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Kerala Finance Minister Thomas Isaac, too, said that decision on the important issue of GST on lottery cannot taken without a fair discussion. He said including lottery in the council's agenda only a day before the meeting is unfair.
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“I will walk out of the council meeting if any decision is taken on lottery. Also I will henceforth not attend any council meetings till the elections are over. This is not cooperative federalism,” Isaac told PTI.
The Finance Ministry, however, issued a media advisory stating that the 33rd GST council meeting would be held on Wednesday.
The council meeting is scheduled to be held through a video conference with Union Finance Minister Arun Jaitley joining from North Block, while state finance ministers connecting from their respective states.
Rationalisation of GST rates on real estate and lottery are on the agenda of the council meet.
Sisodia in his letter said: “I would, therefore, request to kindly postpone the proposed 33rd meeting through video-conference and call for a physical meeting at an appropriate date.”
Isaac, further, said that discussions on serious issues cannot take place through video conference and stressed that it was unfair for the Group of Ministers on lottery to meet when two senior ministers were not able to attend it.
“Meeting though video conference should be held only when some urgent matter has to be decided. This is being done to avoid collective response. We will protest tomorrow,” Issac said.
The eight-member GoM, under Maharashtra Finance Minister Sudhir Mungantiwar, set up to look into the taxation of lottery in a meeting favoured a uniform GST rate of either 18 percent or 28 percent, but left it to the GST Council to take a final call.
Currently, a state-organised lottery attracts 12 percent GST while a state-authorised lottery attracts 28 per cent tax.
The other members of the committee are West Bengal Finance Minister Amit Mitra, Kerala Finance Minister Thomas Isaac, Assam Finance Minister Himanta Biswa Sarma, Punjab Finance Minister Manpreet Singh Badal, Goa Panchayat Minister Mauvin Godinho, Karnataka Finance Minister Krishna Byre Gowda, Arunachal Tax and Excise Minister Jarkar Gamlin.
While Isaac had sought deferment of the GoM meeting on medical ground, Badal was not present as he had to present the state budget in Punjab Assembly
Besides, tax officers from West Bengal flagged the issue of rate rationalisation in the light of the general election slated to be held by May.
However, states, like Maharashtra and Assam, favoured a uniform GST rate.
The GoM favoured hiking GST rate on the state-organised lottery to either 18 percent or 28 percent. While the GST rate on state-authorised lottery would be retained at 28 percent or brought down to 18 percent.
“When you reduce GST rate on lottery the only person to gain is lottery mafia. There is some corruption involved,” Isaac said.
With regard to real estate sector, a state ministerial panel on GST rates for real estate sector had earlier this month suggested cutting GST on under-construction residential properties to 5 percent without input tax credit, from 12 percent currently. On affordable housing segment, it suggested that GST be slashed to 3 percent, from 8 percent.
Currently, GST is levied at 12 percent with input tax credit on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.
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