Tamil Nadu Voices Concerns Over GST Reforms Impacting State Revenue
The Tamil Nadu government acknowledged the Centre's GST reforms but raised concerns about state revenue protection. Finance Minister Thangam Thennarasu proposed maintaining the existing Cess provision or amending the GST Act. The GST Council agreed to implement the recommendations by December 2025. Tamil Nadu urged for a review of compensation cess on sin goods.
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The Tamil Nadu government has given its nod to the Centre's Goods and Services Tax (GST) rate rationalisation reforms, embracing them while emphasizing the need to secure state revenue. Amidst the changes, significant exemptions will include individual life and health insurance services.
State Finance Minister Thangam Thennarasu suggested two alternatives: Continuation of the current Cess provision through a constitutional amendment or increasing the tax rate on sin and luxury goods via a GST Act amendment. During the 56th GST Council meeting in New Delhi, Minister Thennarasu underscored the necessity of implementing the Committee of Officers' report on Integrated GST Settlement thoroughly before December 2025.
Welcoming the automated mechanisms for export refunds and simplified business registrations, Tamil Nadu hopes the GST Council will consider its recommendations on the extension of compensation cess on sin goods. The meeting was also attended by senior officials including Principal Secretary of the Finance Department, T Udhayachandran.
(With inputs from agencies.)
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