NEW DELHI, Nov 27: The Congress on Wednesday raised
in Rajya Sabha the issue of the Centre delaying payment of
compensation to states for revenue shortfall in the Goods and
Services Tax (GST) since August, saying this may lead to
stoppage of development work and payments to employees.
Raising the issue through a Zero Hour mention, Pratap
Singh Bajwa (Cong) said states gave up the right to levy taxes
in the interest of ‘one-nation-one-tax’ regime of GST.
When the GST subsumed 17 different central and state
levies in July 2017, states were assured that they will be
compensated for any loss of revenue vis a vis pre-GST
position, for the first five years of the introduction of GST.
Bajwa said initially the compensation was to be paid on a
monthly basis and later once in two months.
But the compensation for August, September and October
has been pending and it is end November with no sight of when
it will be paid, he said.
Punjab, he said, is to receive Rs 2,100 crore in GST
compensation and together with Rs 2,000 crore arrears its
total dues are Rs 4,100 crore.
Delays in payment is “grossly unfair” for small states as
it may “stall development work and payment of pensions,” he
said.
Last week, five non-BJP ruled states had raised concerns
over delay in payment of GST compensation by the Centre,
resulting in pressure on their finances, as GST comprises
significant chunk of revenues for state governments.
In a joint statement issued after the meeting of the
Empowered Committee of State Finance Minister in Delhi last
Wednesday, finance ministers of West Bengal, Kerala, Delhi,
Rajasthan and Punjab had stated that the GST compensation
since continues to be outstanding.
GST comprises nearly 60 per cent of tax revenues of
states. Many states are already facing deficits up to 50 per
cent of the total GST.
As a result, states are facing acute pressure on fiscals
with some already resorting to ways and means or even
overdrafts, the finance ministers had said.
Bajwa said no explanation has been furnished for the
delay in payment of compensation.
He asked Finance Minister Nirmala Sitharaman to look into
the matter and release the compensation without further delay.
Through a separate Zero Hour mention, Manas Ranjan Bhunia
(TMC) said GST collections have fallen short of Rs 1 lakh
crore target.
While everyone was for introduction of GST, it was warned
that hasty implementation will create “turbulent economic
situation”, he said.
The Centre’s compensation to states for revenue shortfall
in GST collections has been delayed as the amount in
compensation cess fund has dried up due to poor collections.
The Constitution Amendment Bill guarantees compensation
to states in the first five years of GST rollout.
The Central government has projected its GST revenue in
2019-20 (Apr-Mar) at Rs 6.63 lakh crore, up 13.6 per cent from
the Rs 5.84 lakh crore collected in 2018-19. (PTI)
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