The row over GST compensation is set for further escalation in the coming days as states, especially the ones ruled by the BJP, have demanded the transfer of the entire compensation cess collected between April and September. After the last GST Council meeting, the Centre had announced immediate transfer of Rs 20,000 crore as compensation cess to states on Monday night.
While that was the first batch of such disbursal in the current financial year, the opposition-ruled states claim that the entire amount collected until September can be pegged at around Rs 35,000 crore. “The figures presented up till August were about Rs 29,000 crore, which would take the total to at least Rs 35,000 crore till September,” Economic Times quoted Chhattisgarh commercial tax minister T.S. Singh Deo as saying, referring to data furnished at the Goods and Services Tax (GST) Council meeting on Monday.
In addition, the states are also demanding the immediate release of about Rs 11,000 crore collected in integrated goods and service tax (IGST). “This and the additional funds of IGST transferred from the Consolidated Fund of India should be given to states,” Deo said.
On Monday, the GST Council headed by the Union finance minister and comprising state finance ministers put off until October 12 a decision on compensating states for an estimated Rs 2.35 lakh crore shortfall in their share of GST this fiscal year, as 10 opposition-ruled states balked at the suggestion that they borrow from the market to make up a part of the shortfall. The states demanded the Centre borrow the entire deficit and reimburse them. At the same time, 21 states have accepted the Centre's proposal and decided to borrow from market. These 21 states can go ahead even if no consensus is reached on the matter at an October 12 meeting.
