Kerala will take the lead once more in bringing together other State governments and experts to deliberate on the Goods and Service Tax (GST) compensation and its implications.
The move comes in the wake of the State rejecting the two options put forward at the GST council on August 27. Finance Minister T.M. Thomas Isaac had last month chaired a meeting of Finance Ministers of Punjab, Delhi, Chattisgarh, West Bengal and Telangana and decided to reject the two options.
Amidst reports that more States are towing the line of the Centre and that the GST compensation would be delayed for States not choosing either of the two options, the new initiative is to organise a webinar jointly by the Gulati Institute of Finance and Taxation (GIFT), Thiruvananthapuram, and the Centre for Research in Rural and Industrial Development (CRRID) Chandigarh on September 28.
Official sources said the aim was to provide a forum for deliberating on the implications of the Centre’s proposal on the already stressed State finances and articulate the responses of the States. The Finance Ministers of West Bengal, Delhi, Punjab, Jharkhand, Punjab and Puducherry have already agreed to attend.
Amit Mitra, Finance Minister of West Bengal, and Chairman of the Empowered Committee of State Finance Ministers on GST, will chair the morning session. In the afternoon, eminent academicians and captains of the media will deliberate on the issue.
Kerala wants the Centre to take loan and provide GST compensation due to the State and it has been communicated in writing. The GST compensation due to the State is ₹7,000 crore.
The first option mooted by the Centre is to provide a special borrowing window to States in consultation with the Reserve Bank of India to provide ₹97,000 crore at a reasonable interest rate. The other option is to meet the entire GST compensation gap of ₹2.35 lakh crore this year itself after consulting the central bank.