GST compensation: State may move SC

Kerala may move the Supreme Court against the decision of the Union Finance Ministry to allow 20 States to borrow from the open market as per Option I of borrowing to meet the Goods and Service Tax (GST) compensation shortfall. The move comes in the wake of the Ministry’s decision on Tuesday to allow borrowing from the open market even as the GST Council failed to arrive at a decision on the vexed issue after three meetings.

Kerala was the first to oppose the Centre’s option 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 and meet the entire GST compensation gap of ₹1.35 lakh crore this year itself after consulting the central bank.

“The Union government is trying to divide the States permanently as those agreeing to the proposals for GST compensation and those opposed to them,” Finance Minister T.M. Thomas Isaac told The Hindu.

“They have the majority and if they take a decision, it will be binding for the minority-opined States. Instead, they are pushing for consensus and forcing everyone to accept their opinion. They want to discriminate due to the unilateral decision taken by them and it is totally unacceptable.”

Meet tomorrow

The Chief Minister is holding a meeting on Friday with the Law Department and other officials and other States are also preparing to approach the Supreme Court. Dr. Isaac said the court cannot put it aside like the habeas corpus of Kashmir as nine States would approach it.

The majority of the nine States that are opposing the proposals are ruled by the Congress and Kerala by the Left Democratic Front. “We have no problem in going with Congress-ruled States jointly to the Supreme Court. We are preparing and we will ensure that all of us move on the same ground,” Dr. Isaac said.

Coming down heavily on Union Finance Minister Nirmala Sitharaman, Dr. Isaac said she was “destroying the GST Council”. Announcements were made not at the council meetings but at press conferences and this was unacceptable.

The Finance Minister said a GST Council decision was required for Option I because it involved postponement, deferment of the compensation payment made beyond five years. Without a council decision, the Centre cannot decide.

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Printable version | Oct 17, 2021 7:03:25 AM |

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