TN govt hails GST rationalisation but expresses concern over state revenue

Chennai, Sep 4 (PTI) The Tamil Nadu government on Thursday welcomed the Centre's Goods and Services Tax rate rationalisation reforms, including exemption of individual life insurance and individual health insurance services but expressed concern over state revenue.

State Finance Minister Thangam Thennarasu suggested either to continue the present dispensation of cess provision through constitutional amendment or increase the bound rate of tax only for sin (tobacco products, among others) and luxury goods through GST Act amendment.

Meanwhile, Leader of Opposition and AIADMK chief, Edappadi K Palaniswami "wholeheartedly" welcomed the "historic decisions" of the GST Council.

Participating in the 56th Goods and Services Taxes (GST) council meeting in New Delhi on September 3, minister Thennarasu emphasised that the report of Committee of Officers on Integrated GST Settlement needed to be implemented in toto for streamlining the IGST settlement process and the GST Council agreed to implement the same before the end of December 2025.

"The minister welcomed the automated mechanism for sanction of provisional refunds for exports and inverted duty structure and supported the simplified registration mechanism for small and low risk businesses to enable ease of doing business," an official release here said on Thursday.

Since the Council recommended to extend the period of levy of compensation cess on sin goods for 2 to 3 months beginning October 31, 2025, Thennarasu expressed hope that the GST Council may examine the suggestions of the Government of Tamil Nadu in near future.

Tamil Nadu principal secretary, Finance Department, T Udhayachandran, principal secretary, Information Technology and Digital Services Department, Brajendra Navnit, Commissioner of Commercial Taxes, S Nagarajan, and senior officers from Tamil Nadu participated in the meeting.

Welcoming the GST rationalisation, Palaniswami said, "The shift to two slabs (5 per cent and 18 per cent), relief on essentials, healthcare, agri-inputs and insurance ensures simplicity, fairness, and progress." He expressed that the next move will simplify compliance, boost consumer confidence, and support economic growth.

"My appreciation to Prime Minister Thiru @narendramodi avl for his visionary leadership in steering transformative reforms, and to Finance Minister Tmt @nsitharaman avl for her dedicated efforts in ensuring a simplified and growth-oriented GST framework," Palaniswami said in a post on the social media platform 'X'.

TN BJP chief spokesperson Narayanan Thirupathy said the reformative move will benefit the common man as the essential commodities would come within their reach.

"Even the price of the consumer durables will come down... it will lead to an increase in productivity. This rationalisation of GST is a revolutionary step that will be the talk of the world," he said. PTI JSP JSP KH SA