At GST meet, Oppn will seek outright grant for cess shortfall, no more borrowing: Cong

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New Delhi, May 27 (PTI) Non-BJP-ruled states will demand an outright Central grant rather than agreeing to borrow more to meet the cess shortfall, and also seek an extension of the protected compensation beyond June next year, the Congress said Thursday, outlining the agenda of Opposition states for the May 28 GST council meeting.

Congress leader and Punjab Finance Minister Manpreet Singh Badal also told a virtual press conference that states would raise their other concerns too at the GST Council meeting being held after a gap of 7.5 months to 'help set the GST regime right'.

He said that with the country affected by the pandemic and due to the emergency situation, the economies of all states have suffered and many businesses shut.

Badal said seven states -- Punjab, Rajasthan, Chhattisgarh, Jharkhand, West Bengal, Tamil Nadu and Kerala -- met virtually on Wednesday and discussed what priorities need to be pursued and how to improve the structural part of the GST.

'What the country is seeking is a leadership to resolve the pending issues,' he said.

He said all states, ruled either by the BJP or its rivals, have been affected by the pandemic and there is a need to bring about structural changes in the GST regime.

'Opposition states will be asking for an outright grant and no borrowing tomorrow and also an extension of the period of compensation,' he told reporters.

He said states would be wanting to go back to the old formula of seeking an outright grant as compensation cess from the Centre after they were 'forced' to borrow more to make up for the cess shortfall.

Badal said that in September last year states agreed 'under duress' to a two-part formula of borrowing more to compensate for the revenue loss.

'We had protested but we had to toe the government of India line.' He said that his understanding was that this was only for the year 2020-21 and now that one sees record collection in January, February, March and April, there is not logic in sticking to the old formula.

Badal said states have been assured compensation of 14 per cent per annum in case of revenue loss, but arrears of compensation have piled up. Punjab alone has pending arrears of Rs 5,000 crore, he said.

Asked whether non-BJP-ruled states have evolved a joint strategy for the May 28 meeting, he said regardless of which party one belongs to, all states have stake in and are equity holders in the GST Council.

'Whatever we speak is not just purely political but also what can move India forward and which can hopefully propel India into a different league of nations.

'It is not a question of whether the states are in opposition or BJP-ruled, the revenues of all states have been impacted. Most states are at the receiving end because of the faulty design of the GST,' he noted.

The Punjab Finance Minister said the states' interests need to be taken care of as they carry out all welfare activities like taking care of health, education, social security.

'The onus of responsibility of the state government is far larger than the Government of India's. All we are looking for is a fair system and a net when the poorest of the poor don't suffer because of the wrong decisions of Government of India or due to the pandemic,' he said.

Pointing to the role of the GST Implementation Committee (GIC), Badal alleged that 50 pages of the GST Council meeting agenda is for mere information on actions already taken by the bureaucracy.

'Are they the people who are constitutionally empowered to run the tax administration of India,' he asked. 'When lives and livelihoods are being impacted and business affected, we can't leave decisions at the hands of the bureaucracy.' 'The GST Council can't be allowed to be short-circuited. We do not want to give our sovereignty to the bureaucracy,' he asserted.

'We would be asking the GST Council tomorrow that this must be either reversed or formal approval must be taken from all the states,' he said, adding the decisions already taken have to be ratified by the states.

Badal also pointed out that the GST Council does not have a vice chairman and a secretariat, and alleged that the CBIC (Central Board of Indirect Taxes and Customs) is setting the agenda for the meetings.

He also flagged the issue of no voting during Friday's meeting as it is being held virtually. PTI SKC TIR TIR