Center owes Punjab Rs 44,000 crore in GST compensation, Manpreet Badal (file)
New Delhi:
Congress on Tuesday accused the Center of committing a “sovereign default” by failing to pay GST compensation to states as required by law and demanded that they be compensated quickly.
Speaking at a joint press conference, Congress leaders Rajeev Gowda, Manpreet Badal and Krishna Byre Gowda also demanded that states be compensated for the estimated loss of Rs 6 lakh crore in revenue due to the coronavirus pandemic.
Ahead of the August 27 GST Council meeting, congressional leaders demanded that states receive the 14 percent compensation on time, as required by the GST Compensation Act.
“Anything less is a betrayal of the faith of the states of India,” they said in a joint statement.
Addressing a virtual press conference, Manpreet Badal, who is Punjab’s finance minister, said the Center owed Rs 44,000 crore in outstanding taxes to the state, hampering their governance.
He said the government telling the parliamentary finance committee that there was no obligation on its part to pay compensation to states “amounts to sovereign default.”
India is not a “Banana Republic” to say it doesn’t have to be, he said.
“I think there is a violation of the constitution regarding the inability to pay compensation (is concerned),” he said. “The BJP government has no respect for the constitution, institutions and people of India.”
Badal also informed that he wrote to Finance Minister Nirmala Sitharaman urging him to activate a dispute settlement mechanism on GST-related issues.
“It cannot be your word against my word. There must be, in the event of a dispute or conflict, a dispute settlement mechanism. The constitution of the GST Council provides for it,” he said.
Once this mechanism is activated, states will have the right to go to the Supreme Court and take legal action in the event of a grievance, he said.
He also said that according to the GST law, there should be a vice-president of the Council who, according to political convenience, should be from an opposition state, as it is believed that the agenda of the GST Council meeting is created by the government and its bureaucracy. .
Rajeev Gowda said the state is at the forefront of the fight against COVID-19 and should be compensated by the Center.
“It is shocking to know that instead of taking action to help states, it is preparing grounds for betrayal. It is replacing cooperative federalism with coercive federalism,” said Gowda.
He said the Center is about to make another “devastating turn” as Prime Minister Narendra Modi “promised” when the GST was enacted that states will be compensated.
“It was only on this basis that the states gave up their constitutional powers of taxation and the GST regime was born. Starving the states of funds has been the official policy of this government,” he said. .
The congressman said that any borrowing that needs to be made to help overcome the COVID-19 crisis must be done by the central government.
It can mobilize resources at a lower cost and bear the debt burden better than governments, Gowda said.
He also called for a reduction in the use of cesses and a fair sharing of income. “It is high time that the formula for sharing central state funds by finance committees becomes a reality.”
Former Karnataka Finance Minister Krishna Byre Gowda said the Centre’s lack of assistance is wreaking havoc on governance and the delivery of essential services.
He said the Center owed Karnataka Rs 13,000 crore.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
