With the Opposition preparing to take on the government in a big way on the issue of delayed payment of the GST compensation cess in Parliament beginning Monday, the Centre is expected to soften its stance and promise to pay the entire shortfall of compensation to states gradually.
States are asking the Centre to pay their entire GST revenue shortfall of Rs 2.35 lakh crore due since April. But, according to the Centre’s calculation, only Rs 97,000 crore of revenue loss to states is due to GST implementation and the rest is Covid-related shortfall.
The position until now is that the Centre has agreed to fully compensate only those losses, which have occurred due to GST implementation and not the Covid-related shortfall in revenues.
This has enraged the Opposition-ruled states.
A senior Congress party leader told DH they are planning to raise several issues related to the “flawed GST”. Compensation cess is one of them. Why should states borrow money to compensate themselves?
“We will demand that the Centre activate the dispute resolution mechanism in the GST Council so that states have legal recourse to the issues they do not agree on.”