Centre bound to pay GST dues, Manpreet tells Sitharaman - ECAS Punjab

Centre bound to pay GST dues, Manpreet tells Sitharaman

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Tribune News Service

Chandigarh, July 31

The state government has raised an objection to the purported stand of the Centre before a parliamentary panel that it had neither the money nor the obligation to pay compensation for the Goods and Services Tax (GST).

“Compensation for the GST is amongst the biggest chunks of revenue for Punjab. Each month, the state gets Rs 1,200 crore as compensation and generally, this is sent by the Centre on a bi-monthly basis. Punjab has received no compensation for the months of April, May, June and July. Denying us money is denying money to the poorest of poor as the state uses 80 per cent revenue for welfare funding,” state Finance Minister Manpreet Singh Badal said.

In a letter to Union Finance Minister Nirmala Sitharaman, Badal said Punjab was already facing a State Goods and Services Tax (SGST) deficit of 45 per cent, which was the highest among the general category states. This was likely to exceed 60 per cent by the time the period of assured compensation was over, he said in the letter, while reiterating that the Centre was bound to pay the GST compensation as promised at the time of GST rollout in July 2017.

Talking to The Tribune, Badal said Punjab was facing one of its worst economic crisis, and was expecting a revenue shortfall of Rs 7,000 crore in the first quarter itself (April- June). “By the end of this financial year, we will be facing a shortfall of Rs 24,000 crore in our revenue collections. The state’s own tax revenue from excise, stamp duty and VAT, and its own non-tax revenue from road tax, entertainment tax, etc, too has witnessed a sharp decline because of the Covid-induced lockdown and the resultant restrictions. The Central government devolutions to the state, too, will be reduced. In a normal year, we would have hoped for Rs 10,000 crore capital expenditure, which may not be possible now. The only saving grace is the bumper wheat crop and a positive outlook for the paddy crop,” he said. The minister, in his letter, also pointed out various steps that the Centre should immediately take to ameliorate its burden of compensation.



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