Harish rejects Centre’s offers, says options not acceptable to Telangana

HYDERABAD: Finance Minister T Harish Rao reiterated the State government’s demand that the Central government should pay the GST compensation to the States. He made it clear that the two options proposed were not acceptable to Telangana on the GST compensation. Participating in the GST Council meeting from Hyderabad on Monday along with Chief Secretary Somesh Kumar and Principal Finance Secretary K Ramakrishna Rao, Harish Rao demanded that the IGST dues to the State be paid immediately.  

“Getting the GST compensation is the statutory right of the States. The Centre should borrow money and pay the entire GST compensation to the States,” Harish Rao told Union Finance Minister Nirmala Sitharaman. Harish Rao also demanded that Rs 30,000 crore, the cess amount, which was with the GST Council, be disbursed among the state. Three instalments of cess amounts were pending with the Centre for the last six months, Harish Rao pointed out. During the Covid-19 pandemic, the States require extra funds, he said.

Harish Rao said that the enhanced FRBM loan amount up to five per cent should not be linked with Atmanirbhar package or the GST compensation amount. The Finance Minister said that `24,000 crore IGST amount was deposited in the consolidated fund in 2017-18. Out of this amount, the Telangana was to get Rs 2,638 crore, which should be paid immediately. Responding to this, the Union Finance Minister assured that the IGST amounts would be given to the States within one week. Harish Rao also demanded that the State had to get another `1,000 crore from the IGST ITC. 

Along with Telangana, West Bengal, and the Congress-ruled States demanded that the Central government pay the GST compensation. Thus, the GST Council did not take any decision on Monday on the payment of the IGST compensation. The GST Council will meet again on October 12 for further deliberations on the payment of  GST compensation to States.

Earlier, the Centre proposed two options for payment of GST compensation. First option was that the GST Council would provide a special window to States for providing `97,000 crore. The second option was that the States could raise loans for the GST compensation. Telangana  rejected the both the options.