Reforming GST: A Call for Relative Measures

Tamil Nadu Minister P T Palanivel Thiaga Rajan critiques the current system for measuring the Goods and Services Tax as 'profoundly flawed'. He suggests it can be improved by 20 different steps without new legislation, emphasizing the need for context in assessing GST collections relative to GDP growth.

Tamil Nadu's Minister for Information and Technology, P T Palanivel Thiaga Rajan, has raised concerns about the current methodology for evaluating Goods and Services Tax (GST) collections, labeling it as 'profoundly flawed'.

He highlighted that while GST collections are reported to hit new highs each quarter, this is primarily due to inflation and GDP growth, rather than any systemic improvement. He stressed the need for a relative measurement of GST collections in comparison to GDP percentage or relative growth rates.

According to December 2024 data, GST collections rose by 7.3% year-on-year, driven by increases in both domestic and export refunds, with central GST at Rs 32,836 crore and state GST at Rs 40,499 crore. Despite being out of the GST council, Thiaga Rajan insists improvements can be made without legislative changes.

(With inputs from agencies.)