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Seven non-BJP-ruled States seek GST loss compensation

The Finance Ministers of non-BJP-ruled States raised their demands at a virtual meeting hosted by Rajasthan Minister Shanti Dhariwal ahead of the GST Council’s meet scheduled for May 28.

Seven States ruled by the Congress and other Opposition parties have demanded that the Centre compensate tax losses to the States under the provisions of the Central Goods and Services Tax (GST) Act at the earliest and enhance the additional borrowing limit to 5% of the Gross State Domestic Product.

Also read: The Hindu Explains | What is the GST compensation due to States?

The Finance Ministers of non-BJP-ruled States raised the demands at a virtual meeting hosted by Rajasthan Urban Development and Housing Minister Shanti Dhariwal here ahead of the GST Council’s meeting scheduled for May 28. The States also sought waiving of all taxes on the goods purchased for fighting the COVID-19 pandemic.

Mr. Dhariwal, who represents the Rajasthan government in the GST Council, said here on Thursday that the Finance Ministers of all States would “remain united” on these issues and raise them effectively before Union Finance Minister Nirmala Sitharaman at the GST Council’s meeting. Chief Minister Ashok Gehlot holds the Finance portfolio in Rajasthan.

“The Union government should respect the spirit of cooperative federalism and release compensation for the GST revenue losses without delay,” Mr. Dhariwal said, while pointing out that this would enable the States to mitigate some of their tax losses caused by the pandemic. Besides, the compensation regime should be extended for five years beyond 2022, he said.

In addition to Mr. Dhariwal, Finance Ministers Amit Mitra (West Bengal), Manpreet Singh Badal (Punjab), Rameshwar Oraon (Jharkhand), T.S. Singh Deo (Chhattisgarh), K.N. Balagopal (Kerala) and P.T.R. Palanivel Thiagarajan (Tamil Nadu) attended the meeting.

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