5 States Cry Over Non-payment of GST Compensation by Central Govt

NIL GST Refund Claim Soluation

The states of India which are under the surveillance of non-BJP rulers like Punjab, Kerala, Rajasthan, West Bengal and Delhi spoke about their concerns related to GST compensations. They voiced against the Centre claiming that states are in the situation of the financial crisis to which centre needs to look upon.

GST compensation is still awaited by such states for the months of August and September which was supposed to be given by the central government in the month of October, declared by the statement by these five states. The states’ treasure is sloping downwards leading them into the pit of financial crisis due to which the concerned authorities are using central bank’s ways and facilities or overdrafts to meet their financial requirements.

On the other hand, Bengal FM Amit Mitra in his statement stressed upon appealing to the Union FM Nirmala Sitharaman to personally pay attention to the issue keeping in mind the provisions passed by Parliament of India.

This won’t be less than a calamity for the states if the centre does not give them their justified compensation. He said, “It is a dangerous situation”. Further to this, he said, it is for the first time in history that the centre has failed to transfer the committed funds to the concerned states. The due amount for West Bengal is Rs. 1,500 Crores. 

Thomas Issac Kerela FM says that their state relied upon the centre for compensation of Rs. 1,600 Crore and that the state is under overdraft for almost a week now. This is for the first time in history that the state is facing such a huge crisis and that immediate action is expected by the centre. 

Punjab FM in his statement revealed that the state is lying in wait of Rs. 2,100 crore in compensation from central government and if the dues are not paid on time then the state is in danger of overdraft.

Read Also: Annual Return Clarifications Issued via Circular No. 124/43/2019 Under GST

The same was the tone of Delhi CM Manish Sisodia who declared that the delay in releasing GST compensation by the Central Government has led to Delhi outstanding Rs. 2,355 Crores. 

The Joint Statement by all the states said that 60% of tax revenues for states come from GST and most of the states are already in debt up to 50% of the total GST. Such deficits are prominent in hindering the pace of development for any state literally bringing the activities of states to a halt.

The Joint statement even revised the scenario when the states agreed to join GST only if there is a provision of compensation inserted in the Constitution of India. Adding on to this the statement said that the current delay in granting GST compensation has shaken the confidence of the states that had so far supported GST.

Overlooking the disparities of GST, states were always by the side of the GST Council supporting them with all their major and minor decisions, the statement said. 

As proposed by many states issue of delayed Goods and Services Tax compensation should be the main agenda of the next GST council meeting and also how the proper revenue collection mechanism can be incorporated providing timely compensations to all the states in the future.

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