Punjab: GST on turbine fuel will cause fiscal crisis in states, says Cheema

Punjab finance minister Harpal Singh Cheema raised this concern during the 55th meeting of the GST Council held in Jaisalmer under the chairpersonship of Union finance minister Nirmala Sitharaman

Punjab finance minister Harpal Singh Cheema on Monday opposed the agenda of bringing air turbine fuel (ATF) under the ambit of Goods and Services Tax (GST) saying that it would pave the way for removing petroleum products from the Value Added Tax (VAT).

In a release issued here, Punjab finance minister Harpal Singh Cheema said this decision would be detrimental to the states already suffering losses due to the GST regime, highlighting that Punjab has earned ₹113 crore during financial year 2022-23, ₹105 crore in 2023-24, and ₹75 crore till November in the current fiscal as VAT on air turbine fuel. (HT File)

He raised this concern during the 55th meeting of the GST Council held in Jaisalmer under the chairpersonship of Union finance minister Nirmala Sitharaman.

In a release issued here, Cheema said this decision would be detrimental to the states already suffering losses due to the GST regime, highlighting that Punjab has earned ₹113 crore during financial year 2022-23, ₹105 crore in 2023-24, and ₹75 crore till November in the current fiscal as VAT on air turbine fuel.

Cheema also sought compensation for the ₹20,000 crore loss incurred by the state due to the implementation of the GST regime. He warned that once the door to transitioning petroleum products from VAT to GST is opened, states would face an unbearable fiscal crisis.

On the issue of ‘Negative IGST Settlement’, Cheema advocated that the GST regime imposes a sudden burden on the states. He urged the Union government to consider the base year 2015-16, instead of the preceding year, for fixing the states share, advocating for compensation cess a continuous process, linking it to capital expenditure to enable states to build their infrastructure.