Centre betraying states on GST: Delhi minister Manish Sisodia

NEW DELHI:  Delhi Deputy CM and Finance Minister Manish Sisodia on Thursday said that the central government has failed in its responsibility in implementing the GST system properly and has left the states to beg for finances.

Terming it as 'betrayal', Sisodia said that the Narendra Modi government is denying the rightful dues of states under the garb of the COVID-19 pandemic. He added that the Delhi government is expected to have a revenue shortfall of around Rs 21,000 crore in the current financial year and has collected Rs 7,000 crore less tax in the last four months.

Amid a chorus by many states for compensation of GST revenue shortfall, the Centre has refused to pay GST compensation to states and asked them to take a loan from the RBI or borrow from the market to meet their revenue shortfall.

Sisodia accused the Centre of failing to fulfil its promise to the states at the launch of the Goods and Services Tax regime four years ago.  "Under GST, the central government was liable to give compensation to states for five years but today, they have refused to do so. States are feeling cheated right now. When GST was rolled out, states were promised that we would be given compensation for the next five years with 14 percent of growth. The central government has refused to pay by saying as per the law, due to the ongoing situation created by Covid-19, we are not liable to pay anything," Sisodia lashed out.

Delhi chief minister Arvind Kejriwal also has on many occasions said that revenue collection in Delhi has reduced significantly and that if the economic situation does not revive then paying salaries to the government’s own staff would be difficult.

"If GST would have not been there, we would have been able to define our taxes. We would have been able to manage our expenses on our own but after joining the GST regime, states had to surrender the most of their rights to GST council," added Sisodia.

‘Delhi government can’t take loan from RBI’

Sisodia said that the Centre has asked states to take a loan from the RBI to meet the revenue shortfall.
However, under the current hybrid system (of governance), the Delhi government cannot take a loan from the RBI. The Centre should take a loan from the RBI on behalf of the Delhi government, he said