GST Row: Chidambaram ‘Compliments’ States That Refused to Borrow

File image of Congress leader P Chidambaram.

(Photo: PTI)

Senior Congress leader P Chidambaram on Tuesday, 6 October, congratulated 10 states for rejecting the government’s option to bridge the gap in the GST compensation cess by borrowing heavily.

Chidambaram in a series of tweets said that the government was liable to provide the GST compensation.

“Liability to provide the GST compensation to the full extent falls on the central government, as reluctantly admitted by the FM yesterday. Naturally, the onus of finding the resources also falls on the central government,” Chidambaram said in a tweet.

Union Finance Minister Nirmala Sitharaman on Monday, 5 October, addressed the media on the outcome of the 42nd GST Council meet, that was held earlier in the day.

She said that this year's compensation cess collected, amounting to Rs 20,000 crore, will be disbursed to the states tonight.

Sitharaman also added that Rs 24,000 crore of IGST, that was to be released to the states which had received less earlier, will be disbursed by the end of next week.

Further, Sitharaman said that the council has decided that compensation cess will be extended beyond five years.

However, having failed to reach a consensus on Monday, the council has deferred a decision on the mode of payment of pending GST compensation share of the states to 12 October.

Around 21 states chose the first option given by the Centre, that involved states borrowing to cover the compensation shortfall. While 10 states refused the Centre's option that they should borrow to settle dues.