States Demand GST Compensation For Another 5 Years

Several states and UTs including Chhattisgarh, Rajasthan, and Delhi on Thursday urged Union Finance Minister Nirmala Sitharaman to extend GST compensation cess window to states, which is expiring in June 2022, for another five years.

State leaders made the demand during a pre-budget consultation meeting held under the chairmanship of Sitharaman in the national capital.
The states also asked the Centre to release outstanding funds as their economy has been impacted badly due to COVDI-19 pandemic.

Talking to reporters after the meeting, Chhattisgarh Chief Minister Bhupesh Baghel demanded that the GST compensation to states should be continued for another five years.

Baghel said there has been a loss of revenue to the states due to the GST tax system. “The Centre has not made arrangements to compensate the loss of revenue of about Rs.5000 crore to the state in the coming year, so the GST compensation grant should be continued for the next 5 years even after June 2022.”

Manish Sisodia, Deputy Chief Minister of Delhi, said the GST compensation is the biggest problem of states. “If the GST compensation will not be extended the states like Delhi would not be able to make Budget,” he said.

Subhash Garg, a minister in Rajasthan Government sought an extension of the compensation cess window till 2027.

Chandrima Bhattacharya, minister in the Government of West Bengal, also demanded extension of GST compensation till 2027.

Sitharaman chaired the pre-budget consultations with the Finance Ministers of States and Union Territories (with Legislature) for Union Budget 2022-23. The meeting was attended by Union Minister of State for Finance, Chief Ministers, Deputy Chief Ministers, Finance Ministers, Ministers and senior officials.

“Most of the participants thanked the Union Finance Minister for financially supporting their States/Union Territories during the worst months of pandemic, by enhancing borrowing limits, providing back to back loans to States, and through Special assistance for capital expenditure,” Finance Ministry said in a statement released after the meeting.

“The participants also gave numerous suggestions to the Union Finance Minister for inclusion in the Budget Speech. The Finance Minister thanked the participants for their inputs and suggestions towards Union Budget 2022-23 and assured them to examine each of the proposals,” it said. (ANI)