Kerala rejects Centre’s proposal of borrowing by states to meet GST shortfall


PTI, Aug 31, 2020, 4:13 PM IST

New Delhi: Kerala will reject “lock, stock, and barrel” the Centre”s proposal of borrowing by states to meet GST revenue shortfall, state finance minister Thomas Isaac said on Monday, August 31.

The Centre and opposition-ruled states like Punjab, Kerala, Delhi, and West Bengal, are at loggerheads over the financing of the Rs 2.35 lakh crore Goods and Services Tax (GST) shortfall in the current fiscal. Of this, about Rs. 97,000 crore is on account of GST implementation, and the rest Rs 1.38 lakh crore is the impact of COVID on states’ revenues.

The Centre last week gave two options to the states to borrow either from a special window facilitated by the RBI or from the market and has also proposed extending the compensation cess levied on luxury, demerit, and sin goods beyond 2022.

“Now that we fully understand Centre’s intentions on GST Compensation we have no choice other than to reject them lock, stock, and barrel. No state with Aatmanirbhar can accept them. Enough is enough. No more surrender of states’ rights. GST Compensation is our constitutional right,” Isaac tweeted.

At the GST Council meeting on August 27 on compensation, Finance Minister Nirmala Sitharaman had said that COVID-19 is an ”Act of God” and it was necessary to differentiate between GST shortfall and the pandemic-related shortfall.

“We all got it wrong regarding Centre”s proposal on GST deadlock. This itself is a sad commentary on proceedings of Council. We discuss for 5 hours and then the Chair comes up with proposals which are totally disconnected with discussions and no time left for any clarification,” Isaac tweeted.

While the Centre has reasoned its proposal on premise that it is already saddled with a large borrowing requirement given the slowdown in revenue collections due to a slump in the economy, non-BJP ruled states such as Punjab, Kerala, Delhi, and West Bengal have already stated that raising debt is not an option for already stretched state finances.

During April-July of the current fiscal, the total compensation requirement of states stands at Rs 1.50 lakh crore. Total GST collection during April-July was Rs 2,72,642 crore, which is 65 percent of what was collected in the same period last year.

The payment of GST compensation to states became an issue after revenues from the imposition of cess started dwindling since August 2019. The Centre had to dive into the excess cess amount collected during 2017-18 and 2018-19.

The Centre had released over Rs 1.65 lakh crore in 2019-20 as GST compensation. However, the amount of cess collected during the 2019-20 was Rs 95,444 crore.

The balance Rs 69,556 crore was paid from the excess cess collected in 2017-18 and 2018-19. The compensation payout amount was Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

BJP’s goal is to take India from appeasement to fulfilment: PM Modi

Gold packed in milk powder packets seized at Mangaluru International Airport

Mangaluru: Police bust beef sale racket; accused flees

Ensure hoisting of national flag in every house in August: Minister Ashwath Narayan

Gold-smuggling through diplomatic bag case: Swapna Suresh claims threat to life

Arunachal: Strategic bridge at border with China washed away in flash flood

Security lapse: Man sneaks into West Bengal CM’s residence, spends night


Related Articles More

BJP’s goal is to take India from appeasement to fulfilment: PM Modi

Gold-smuggling through diplomatic bag case: Swapna Suresh claims threat to life

Arunachal: Strategic bridge at border with China washed away in flash flood

Security lapse: Man sneaks into West Bengal CM’s residence, spends night

ED issues summons against ex-Mumbai police commissioner Sanjay Pandey

MUST WATCH

NEWS BULLETIN 03-07-2022

The deer swallowed 80 kg. A python weighing 14 feet long!

Vitla College Student doing Good Job

Rowdysheeter parade at Koppala

Mangaluru : 13-year-old boy cooks up attack story case twist


Latest Additions

BJP’s goal is to take India from appeasement to fulfilment: PM Modi

Gold packed in milk powder packets seized at Mangaluru International Airport

Mangaluru: Police bust beef sale racket; accused flees

Former India goalkeeper EN Sudhir dies; AIFF offers condolences

Ensure hoisting of national flag in every house in August: Minister Ashwath Narayan

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.