GST system is profoundly flawed, can be corrected without new legislations: TN Minister

Chennai, Jan 4 (PTI) Tamil Nadu Minister P T Palanivel Thiaga Rajan on Saturday said the existing system to measure the Goods and Services tax is ‘profoundly flawed’ and can be corrected by 20 different steps without needing any new legislations.

The Minister for Information and Technology and Digital Services, at an event here said if the government has to say something ‘profound’ it must say it in relevance to something.

“At every quarter, we used to get this kind of statement from Delhi, we have record GST collections. And every quarter, I used to ask, so what? If GDP keeps going up every year, the total volume of (GST) transactions goes up every year, so the GST collections grow every year. That is just math. Inflation and GDP growth have been built into it,” he said.

Thiaga Rajan was making those comments at the Global Alumni Meet of NIT Trichy, 2025 here on Saturday.

“If you (central government) want to say something profound, say, as a percentage of GDP, the GST collections have gone up. As a ratio of relative growth, the number is higher. As compared to the last two quarters, the relative ratio is better. Something must be relative to something. You just say absolute (figures). I say that because, I keep saying that at every chance I get though, I am no longer with the GST council. The system is profoundly flawed and can easily be corrected by 20 different steps without needing any new legislations or constitutional amendments..” he said.

In December 2024, the gross GST collections rose 7.3 per cent year-on-year to Rs 1.77 lakh crore, (as compared to Rs 1.65 lakh crore in December 2023) despite significant increase in both domestic and export refunds.

As per government data released on January 1, the central GST collection stood at Rs 32,836 crore, State GST at Rs 40,499 crore, Integrated GST (IGST) at Rs 47,783 crore and Cess at Rs 11,471 crore.