GST Council Meeting: AP Finance Minister Payyavula Kesav Makes Key Suggestions

In the 55th GST Council meeting held on Saturday in Jaisalmer, Rajasthan, Andhra Pradesh Finance Minister Payyavula Kesav proposed several key recommendations addressing the state's interests. He focused on reforms to the GST structure and suggested measures to aid Andhra Pradesh’s flood-affected regions.

Among his proposals, Kesav recommended introducing a 1% "AP Flood Cess" on goods falling under GST slabs above 5%, exclusively for transportation within the state. He assured that this would not affect the poor or middle-class citizens. The revenue from this cess would be utilized for relief and rehabilitation in flood-hit areas. Kesav highlighted Kerala’s 2018 implementation of a similar cess during its devastating floods as a precedent.

He also called for an exemption from GST on research services conducted by both public and private institutions to foster innovation. Additionally, Kesav urged a reduction in GST rates on fortified rice distributed to the poor through ration programs.

Kesav emphasized the need for greater transparency in the IGST settlement system, suggesting that states be provided access to pertinent data. He advocated leveraging technology to simplify GST registrations as part of the "Ease of Doing Business" initiative and proposed measures to curb bogus registrations.

The Finance Minister further recommended exempting small traders and composition GST taxpayers from the reverse charge mechanism (RCM) on rental payments. He highlighted the proactive steps taken by Andhra Pradesh Chief Minister N. Chandrababu Naidu in addressing key state requirements at the GST Council. Kesav’s keynote address received praise from Finance Ministers of other states for its clarity and focus.

Acknowledging input from multiple states, including Andhra Pradesh, the GST Council decided to form a Cabinet sub-committee to review these suggestions. Kesav expressed his gratitude to Union Finance Minister Nirmala Sitharaman for promptly setting up the committee.

Accompanying Kesav at the meeting were Andhra Pradesh Principal Secretary of Finance Piyush Kumar and Commercial Taxes Chief Commissioner Ahmad Babu.