Kerala led nine other States in rejecting the two options for Goods and Services Tax (GST) compensation mooted by the Union government at the 42nd GST Council on Monday.
Finance Minister T.M. Thomas Isaac, who represented the State, said Chhattisgarh, Maharashtra, Delhi, Punjab, Rajasthan, Telangana, Puducherry, Jharkhand, and West Bengal, supported Kerala’s stance and was of the view that the Centre should take loan for the payment of the GST compensation. Dr. Isaac said 20 States favoured the first option mooted by the Centre at the last GST council. The first option is to provide a special borrowing window to States in consultation with the Reserve Bank of India to provide ₹97,000 crore at a reasonable interest rate. The other option is to meet the entire GST compensation gap of ₹2.35 lakh crore this year itself after consulting the Central Bank.
In Monday’s deliberations, 10 States rejected the proposals mooted by the Centre to extend the compensation cess beyond 2022.
ADVERTISEMENT
The Finance Minister said the Centre and the States that supported the options of the Centre were not ready for discussions on who would borrow in what proportion, what amount would be borrowed, and what amount would be deferred. Instead, as in the last GST Council, after extending the meeting to 6.30 p.m., it was announced that the States that opposed the Centre’s suggestions should intimate their stance once more, Dr. Isaac said.
‘Decide through vote’
“Kerala opposed it and said it was not the GST Council’s decision. The Centre is a member of the GST Council and hence decisions should be taken through voting. The legal provisions for Dispute Resolution Mechanism should be activated. Nine States supported us. Without going for a vote after eight hours of deliberations, it was announced that the GST Council will take a call on the compensation at the next meeting on October 12,” he said.
ADVERTISEMENT