Finance Minister T. Harish Rao has represented to the Union Finance Minister and Chairperson of the GST Council to release the GST compensation dues of ₹3,975 crore pertaining to the months of April and May and devolution of funds for the State for the month of June.
Mr. Harish Rao who attended the 40th meeting of GST Council through a video conference here on Friday took to the notice of the Council several issues of concern to the State.
He said that the State’s revenue fell steeply due to COVID-19 crisis and any shortfall or delay in the release of GST compensation would adversely affect many welfare programmes and development activities implemented by the State of Telangana. The assured GST revenue with a growth of 14% promised by the Centre was considered while drafting of the budget and any failure in fulfilment of this assurance would put the State in a difficult situation for implementing many of its programmes.
Revenue fall
There was huge fall in revenue from other sectors too during the lockdown period and not releasing the compensation would aggravate the economic crisis being faced by the State. At present, the State government was paying only part of the salaries to the employees due to lack of funds, Mr. Harish Rao said.
The State Finance Minister suggested that the GST Council borrow to meet the commitment given by the Centre for payment of GST compensation to the States, if necessary by amending the provisions of the Act.
He sought to bring to the notice of the Council that Telangana performed well on the revenue front and was one of the few States which had taken little GST compensation from the Centre since the introduction of GST in July 2017. When the need for compensation arose and if the Centre would not come forward to fulfil its obligation, it would severely disappoint the State.
The State was also not getting any revenue on account of revenue deficit and 15th Finance Commission also did not favour the State and it reduced the State share in the devolution, he said.
IGST amount
The Finance Minister however, expressed his gratitude to the GST Council Chairperson for reversal of IGST amount of ₹1.76 lakh crore from the Consolidated Fund of India, a long standing demand of Telangana. Telangana was expected to get ₹2,800 crore on this account and urged the Chair to release the amount to the State.
Mr. Harish Rao said that under the leadership of Chief Minister K. Chandrasekhar Rao, the State stood first in the country barring few north-eastern States in revenue performance by recording least revenue gap of 11.5% for the year 2019-20. Telangana also achieved the highest revenues since the implementation of GST in 2017 and did not take any compensation during the years 2017-18 and 2018-19.
