CHENNAI: Tamil Nadu’s Finance Minister Thangam Thennarasu, offered conditional support for new Goods and Services Tax (GST) reforms in the 56th GST Council meeting held in the capital on Wednesday, while strongly advocating for measures to protect state revenues, a press release said.

The minister welcomed key proposals on the table, including the exemption of individual life and health insurance services from GST. He also praised initiatives for an automated system for provisional refunds for exports and a simplified registration process for small and low-risk businesses, calling them vital for ease of doing business.

However, Minister Thennarasu expressed significant concerns regarding the potential impact of broader rate rationalization on state finances.

To safeguard revenue, he proposed two solutions: either continuing the current cess mechanism via a Constitutional amendment or specifically increasing the tax bound rate exclusively on sin and luxury goods through an amendment to the GST Act.

A major outcome of the meeting was the Council's agreement to fully implement the report of the Committee of Officers on Integrated GST (IGST) settlement. As emphasized by the Tamil Nadu minister, this move is aimed at streamlining the IGST settlement process, with a deadline set for implementation before the end of December 2025.

With the Council recommending a 2-3 month extension of the compensation cess on sin goods beyond its scheduled end on October 31, 2025, Minister Thennarasu expressed hope that this would provide a window for the Council to examine the specific suggestions put forth by the Government of Tamil Nadu.

The Tamil Nadu delegation at the meeting included Principal Finance Secretary T. Udhayachandran, Principal IT Secretary Brajendra Navnit, and Commissioner of Commercial Taxes, S. Nagarajan, among other senior officials.