Union Finance Secretary Says Centre in No Position to Pay GST Dues to States

Business

In a meeting of the Parliamentary Standing Committee on Tuesday, Union Finance Secretary Ajay Bhushan Pandey said that the government is in no position to pay the GST share of States as per the current revenue sharing formula, sources informed The Hindu.

According to the report, Pandey’s comments were in response to a question on the revenue shortfall due to the pandemic. The members then questioned him on how the government could renege on the commitment to the States. At this, “he pointed out that the GST Act has provisions to rework the formula for paying compensation to the State governments if the revenue collection drops below a certain threshold,” one of the members said on condition of anonymity to The Hindu.

The Finance Ministry on Monday said the Centre had released the final installment of Rs 13,806 crore of GST compensation for the financial year 2019-20.

The GST Council was scheduled to meet in July to try and work out the formula to rework the compensation to the States. However, the meeting has not been convened so far.

The opposition members meanwhile were up in arms, as the committee which was meeting for the first time since the nationwide lockdown instead of discussing the state of Indian economy, took up the topic “Financing the innovation ecosystem and India’s growth companies”.

Congress MPs Manish Tewari, Ambika Soni, Gaurav Gogoi and NCP MP Praful Patel, according to sources, vociferously, demanded that the Committee discuss the current state of economy which has suffered a huge set back because of the pandemic. Tewari in a letter to Chairperson, Sinha, had earlier pointed out that the people will consider the Committee to be “delusional” to discuss the chosen topic in a hour of crisis.