Don't transfer burden of GST compensation to states, Kerala CM urges PM
Sep 02, 2020
Thiruvananthapuram (Kerala) [India], Sept 2 : In a letter, Kerala Chief Minister Pinarayi Vijayan on Wednesday urged Prime Minister Narendra Modi to advise the union finance ministry not to go ahead with plans of transferring the burden of GST compensation to the states.
Vijayan said the Central government should instead follow the letter and spirit of the Goods and Services Tax (Compensation to States) Act, 2017.
"I write this letter to convey the concerns of the Government of Kerala with regard to the hurdles in the payment of Goods and Services Tax (GST) compensation to the States. When GST was implemented it was agreed upon that the States would be assured of an annual compounded growth rate of 14 per cent in GST revenue with 2015-16 as the base year during the initial five years of implementation," the Kerala CM stated in the letter.
In the letter, CM Vijayan said that Section 7 of the Act states that compensation shall be payable to the states and it shall be provisionally calculated and released at the end of every two months. "Unfortunately, since 2019-20, this provision has not been adhered to," the letter read.
He claimed in the letter that from April 1, 2020, no compensation has been released to the states and added that the amount due to Kerala from April to August of the financial year 2020-21 is Rs 7,7000 crore.
"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," the Kerala CM stated in the letter.
