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New Delhi:
Delhi Chief Minister Arvind Kejriwal as we speak wrote to Prime Minister Narendra Modi, urging him to think about extra legally viable and sustainable choices for offering GST dues to states to assist them tide over the COVID-19 monetary disaster.
The two choices of borrowing introduced by the Ministry of Finance, which primarily require the states to borrow after which meet reimbursement liabilities will put an especially “onerous burden” on states, he mentioned.
According to an official assertion, the Chief Minister mentioned the GST Council ought to think about authorising the Centre to borrow on its behalf and prolong the interval of assortment of cess past 2022.
Terming the GST reform as a landmark reform within the oblique tax construction of India, Mr Kejriwal within the letter mentioned the reassurance of the GST compensation to states to satisfy the shortfall in collections is among the pillars on which the whole GST edifice rests.
He additionally mentioned that every one states will overcome the unprecedented state of affairs that the COVID-19 pandemic has introduced earlier than the nation by working collectively.
“The two options of borrowing presented by the Ministry of Finance, Government of India which primarily require the states to borrow and then meet repayment liabilities will put an extremely onerous burden on States which are, as it is, reeling under financial crisis due to shortfall in revenue collections and an increased commitment of expenditure emerging from COVID-19 response,” Mr Kejriwal mentioned within the letter to PM Modi.
He mentioned the Goods and Services Tax (Compensation to States) Act, 2017, very clearly supplies for compensation to states for lack of income arising on account of the implementation of the GST in pursuance of the availability of the Constitution (101st Amendment Act, 2016).
“To create an artificial distinction between loss occurring due to implementation of GST and those occurring due to COVID-19 pandemic goes against the very spirit of the Compensation Act and will lead to a creation of a trust deficit between the Centre and the States, wherein in future, the states will be hesitant in coming together to achieve more such larger common national goals, as was done through the implementation of GST,” he additionally mentioned.
The Centre and non BJP-ruled states are at loggerheads over the financing of the Rs 2.35 lakh crore GST shortfall within the present fiscal. Of this, as per Centre’s calculation, about Rs 97,000 crore is on account of GST implementation and relaxation Rs 1.38 lakh crore is the impression of COVID-19 on states” revenues.
The Centre final week gave two choices to states to borrow both from a particular window facilitated by the Reserve Bank of India or from the market and has additionally proposed extending the compensation cess levied on luxurious, demerit and sin items past 2022.
(Except for the headline, this story has not been edited by NDTV employees and is revealed from a syndicated feed.)
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