Date: Wednesday, July 29, 2020
The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
Centre Must Pay the GST Compensation Dues to the States
Four months after the last financial year, the Centre has finally paid the GST compensation dues to the states upto March 31. However, Finance Secretary informed the Parliamentary Standing Committee that the government is in no position to pay the GST share of the states as per the current revenue sharing formula for this financial year, 2020-21.
State governments were guaranteed compensation from the Centre for the first five years of GST implementation. This compensation was in lieu of GST taking away the powers of states to levy some indirect taxes to raise revenues.
This decision regarding the compensation to the states is part of the GST legislation. Its implementation was cleared by the GST Council.
For the Central government to now renege from these commitments is tantamount to further centralization of authority, violating the federal principles of our Constitution and depriving the states of their legitimate revenues. This is not acceptable. These funds are all the more needed now when the single-minded focus should be of combating the pandemic.
The CPI(M) reiterates its earlier demand that the entire fund collected in the name of combating the pandemic, in a non-transparent, non-auditable private trust fund, bearing the name of the PM, should be transferred to the state governments who are in the forefront of the efforts to combat the pandemic.
The Polit Bureau of the CPI(M) demands that the GST compensation dues for the first quarter of 2020-21, which has just ended, be transferred to the states immediately. It is absolutely essential to adhere to the earlier commitments and more importantly to help the states to combat the pandemic more effectively.