AAP govts in Punjab, Delhi to push for GST compensation
CHANDIGARH: The Aam Aadmi Party-led governments in Delhi and Punjab will push for extending the five-year compensation period of the goods and services tax (GST) at the GST Council meeting here. Delhi’s deputy chief minister Manish Sisodia, who is in Chandigarh to participate in the two-day meeting of the Council starting Tuesday, said that both states will take up the issue (at the council meeting). “GST is an experiment. I am of the firm view that compensation should be extended till the time the experiment succeeds,” he told Hindustan Times.
Sisodia said the states are bleeding and need to be supported by the Centre.
“I have had discussions with the finance ministers of several states, including some NDA (National Democratic Alliance)-ruled states, and they are in favour of extending the compensation period,” he said. When the GST law was introduced, states were guaranteed a 14% year-on-year increase in their annual revenue for five years from July 1, 2017, and assured of compensation in case of any shortfall in revenue. The five-year period is ending on June 30.
The meeting will be chaired by Union finance minister Nirmala Sitharaman. Punjab finance minister Harpal Singh Cheema has already written to the Union finance ministry seeking extension of the GST compensation period.
Punjab, which is among the states with the highest shortfall, has received GST compensation totaling Rs 54,506 crore between 2017-18 and 2021-22 for shortfall in revenue. Cheema, who presented his first budget on Monday, said that the state government would be staring down a big hole in its finances to the tune of Rs 15,000 crore per annum due to the end of GST compensation regime. States such as West Bengal and Kerala have urged the Centre to extend the compensation for another three to five years, citing the impact of coronavirus pandemic on their economies.
Asked about Punjab’s budget, Sisodia, who was present in the state assembly when Cheema read out his budgetary proposals, said the vision for next five years has been outlined and work started on the implementation of promises made to people of the state.
“Everything cannot be achieved in the first year. There are budgetary constraints. Promises like school reforms are long-term agendas, but the government has already got going on them,” he said, lauding the state team.