Cheema demands ₹50,000 cr from Centre over GST losses

Agreeing to the proposed Goods and Services Tax (GST) rate cuts, the Bhagwant Mann-led Aam Aadmi Party (AAP) government on Thursday demanded that the Centre should release ₹50,000 crore to Punjab to compensate the state for the loss it suffered due to the indirect tax regime

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Agreeing to the proposed Goods and Services Tax (GST) rate cuts, the Bhagwant Mann-led Aam Aadmi Party (AAP) government on Thursday demanded that the Centre should release ₹50,000 crore to Punjab to compensate the state for the loss it suffered due to the indirect tax regime.

Chandigarh : Agreeing to the proposed Goods and Services Tax (GST) rate cuts, the Bhagwant Mann-led Aam Aadmi Party (AAP) government on Thursday demanded that the Centre should release ₹50,000 crore to Punjab to compensate the state for the loss it suffered due to the indirect tax regime.

After a meeting of the group of ministers (GoM) on the GST, Punjab finance minister Harpal Singh Cheema claimed that the GST inflicted a ₹1.11-lakh crore loss on Punjab as the Centre released only ₹60,000 crore so far. Over ₹50,000 crore and ₹8,000 crore Rural Development Fund (RDF) remain due, he said, adding the state would not have suffered such massive revenue losses had it not joined the “One Nation-One Tax” scheme. “With the compensation cess now scrapped, the BJP government is deliberately wrecking state economies to make them beg before the Centre,” he alleged at a press conference in Delhi.

Cheema said that GST was introduced in 2017, and there have been 27 amendments in GST in the past eight years, with exemptions given to different sectors, and rates were revised 15 times. “Since the GST was introduced, the central government has kept making one amendment after another, but never reached a conclusion. Taxpayers are being harassed continuously. The system of the country is being destroyed. Several states are continuously losing revenue due to the GST system. The central government has backed away from making up for this loss,” he claimed.

Detailing the latest discussions, Cheema said: “In Thursday’s meeting on compensation cess, the central government said that the loans taken to pay states under compensation cess would be fully repaid by October. On harmful goods (sin goods), a special tax was imposed. The states suffering losses in its collection were being compensated. But now the report of the rate rationalisation committee shows that even the tax slab on sin goods is being reduced.”

Raising concern over GST rate cuts, the finance minister said that in the rate rationalisation committee meeting, he demanded that the Centre clarify who will compensate for the revenue loss to states caused by reduction of GST rates.