We need GST compensation, not loans: Seven states fell against the Center

New delhi date. Monday, August 31, 2020

After the GST collection, the central government has not reimbursed the states in terms of revenue, which could lead to further catastrophe in the states affected by the Corona epidemic. In the midst of this situation, the central government has told the states that they can take loans from banks in this regard. However, the proposal has been rejected by seven states and one union territory of the country and demanded immediate payment of GST rebates by the central government.

Most of the states that have rejected the Centre's demand are non-BJP ruled, Kerala, Delhi, Punjab, Rajasthan, Chhattisgarh, West Bengal, Tamil Nadu, Telangana have now decided to fight the Center over the GST issue. Punjab Finance Minister Manpreet Singh Badal has said that if the state governments take loans, the law enacted by the central government on GST refund will have to be amended.

The Act clarifies that the Central Government is obliged to compensate the State Governments for the loss of revenue after the implementation of GST. Kerala Finance Minister Thomas Isaac has said that the finance ministers of Punjab, Delhi, West Bengal, Chhattisgarh, Telangana and Kerala have decided to jointly oppose the Centre's proposal to take a loan from a bank instead of reimbursing GST.

The Punjab Finance Minister has written a letter to Union Finance Minister Nirmala Sitharaman on the matter and demanded that the Center give the states their right to GST compensation on an immediate basis and convene a meeting of the GST Council at the same time. While the Finance Minister of Kerala has put the demand of the state before the Center by tweeting.

Last week, the central government had given two options to the states in terms of GST refund, asking them to take loans from the Reserve Bank under a special window, as well as another option from the market. The Tamil Nadu government has also joined the protest. Tamil Nadu Chief Minister Palaniswami had written a letter to Prime Minister Narendra Modi requesting him to pay immediate GST compensation.

If the Center does not pay us GST, it will be more difficult for the states to cope with the current Koro epidemic. Apart from this, the public interest programs launched by the states and schemes for helping the poor will also be affected. Telangana has also lashed out at the Center, saying the state has lost Rs 8,000 crore in just four months.