Kerala Chief Minister Pinarayi Vijayan has written to Prime Minister Narendra Modi over GST compensation to the states on Wednesday, 2 September, requesting him to advise the Finance Ministry not to transfer the burden of GST compensation.
“It is felt that transferring the obligation of GST compensation to the states through their borrowing is not in accordance with the spirit of understanding reached between the Centre and the states during the discussions preceding the constitutional amendment for bringing in GST,” wrote Vijayan in his letter.
He also stated that “when GST was implemented, it was agreed upon that the states would be assured of an annual compounded growth rate of 14 percent in GST revenue with 2015-16 as the base year during the initial five years of implementation,” Vijayan wrote.
He further highlighted that no compensation had been released to the states since 1 April 2020, and that the amount due to Kerala from August to April of financial year 2020-21 is Rs 70,000 crore.
West Bengal CM Expresses Displeasure Over GST
Meanwhile, West Bengal Chief Minister Mamata Banerjee had also written to PM Modi and has expressed displeasure over recent developments regarding GST.
In her letter, Mamta Banerjee said that “despite assurances, states were being thrust with two unilateral options, both of which require the states to borrow lakhs and crores of rupees, when many of them are unable to pay salaries to their employees”.
Chief ministers of other states have also written to the prime minister and the finance minister and have expressed their discontent over the two options given to the states.
During the 41st GST Council Meet, Finance Minister Nirmala Sitharaman had said that the Centre offers two options to states to either borrow the entire Rs 2.35 lakh crore or borrow only Rs 97,000 crore through a special window, which would be provided by the RBI.
The GST council met on 27 August to take up the single-point agenda of GST compensation to states affected by delays in the release by the Centre, news agency IANS reported.
The compensation has not been paid to the states since March. Even the compensation for March was delayed and paid in late July.
(With inputs from News18)