States to take up GST compensation in monsoon session

New Delhi: States are set to take up the matter of compensation for the goods and service tax shortfall in the monsoon session of parliament scheduled to start on September 14, with the GST Council unlikely to meet before September 19. “Many states said that their members of parliament will raise the issue in the house,” said TS Singh Deo, commercial tax minister of Chhattisgarh. “It will be raised in both houses,” Kerala finance minister Thomas Isaac said.

States are likely to hold another meeting once the Centre gets back with the additional information they have sought. Opposition-led and allied states were briefed by the finance secretary and the expenditure secretary about the options offered by the Centre via video-conference on Tuesday. “States have sought more information on state-wise allocation of funds, the level of funding that will be made available, the basis of calculating the Rs 97,000 crore figure and other numbers,” said a senior official, asking not to be identified. “The states will be given these clarifications in writing.”

“The Centre has not given any response to states that have said that they’re not accepting either of the options,” said a senior state official on condition of anonymity. Punjab, Delhi, Kerala, Telangana and West Bengal have officially rejected both the Centre’s proposals. One of the options offered last week was for states to borrow Rs 97,000 crore from a special central bank facility to make up for the shortfall due to the transition to the GST regime, with repayment of the principal and interest to be serviced by the compensation cess.