Opposition-ruled states call for immediate payment of GST dues

GST dues for the months of August and September have not been paid so far

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Finance ministers of opposition-ruled states have ganged up at the empowered committee of state FMs meeting in New Delhi on Wednesday, demanding Union Finance Minister Nirmala Sitharaman to immediately clear GST dues payable by the Centre to the states.

GST dues for the months of August and September, supposed to have been paid by the Centre to the respective states by mid-October, have not been paid so far. What has further incensed the opposition-ruled states is that the Union finance ministry has not even offered an explanation for the delay.

The state ministers have asked Sitharaman to immediately release the amount. The matter is now poised to come up at the next GST meeting, too.

“The assurance of GST compensation was a necessary enabler for the states agreeing to subsume their fiscal sovereignty into GST...the current delay has shaken the confidence of states which have so far supported GST,” says the statement signed by finance ministers of the opposition-ruled states of West Bengal, Kerala, Delhi, Punjab and Rajasthan.

About 60 per cent of the tax revenue of states come from GST revenues. With most states facing budget deficits, the worry is that budget and planning processes of states may soon get affected, with state treasuries running out of money.

The present economic slowdown has adversely affected fiscal plans of the Union government, with the finance minister tapping even Reserve Bank’s reserve funds for schemes to revive the economy.