Ahead of the Goods and Service Tax (GST) Council meeting on August 27, the Congress on Tuesday said the Centre should clear past dues to the States and compensate them for the expected ₹6 lakh crore loss.
Addressing a joint virtual press conference, Punjab Finance Minister Manpreet Badal, former Karnataka FM Krishna Byre Gowda and former Rajya Sabha MP Rajeev Gowda articulated the party’s demand.
“We demand the following from the Central government: compensate States for the expected ₹6 lakh crore loss. Pay States the compensation of 14% as mandated by the GST Compensation Act and pay it on time. Anything less is a betrayal of the faith of India’s States,” they said.
In a statement, they also demanded that the GST compensation cess collection should be extended to 10 years.
“Any borrowing that needs to be done to help tide over the COVID crisis must be done by the Central government. It can raise resources at lower cost and can bear the debt burden better than States. Reduce the reliance on cesses and share the revenues fairly,” they added and asserted that the Centre-State fund sharing formula from Finance Commissions should become a reality.
The Congress leaders argued that independent revenue streams for the State governments that is earned through tax on liquor, petrol, diesel, property sale and purchase have been severely impacted while the expenditure on salaries and pensions remain the same.
“States are at the forefront of the fight against COVID. At such a crucial time, it is crucial that the Central government come to the aid of States. A loss of ₹6 lakh crores will force States to cut down the expenditure of key programmes and policies. What steps is the Modi government taking to avert this crisis?” the leaders asked.
Congress president Sonia Gandhi is scheduled to hold a virtual meeting with the Finance Ministers of the Congress-ruled States on GST as well NEET JEE exams.