KOCHI: Finance Minister TM Thomas Isaac on Tuesday said nine states including Kerala will jointly approach the Supreme Court if the Central government goes ahead and insist that the states borrow up to Rs 1.1 lakh crore as this year’s compensation on account of the implementation of the Goods and Services Tax (GST).This year’s total GST compensation amount is Rs 2.34 lakh crore. The Centre has stated its intent to facilitate borrowing under Option 1 — Rs 1.1 lakh through a special window facilitated by the RBI and Finance Ministry. (Option 2, which has had no takers, allows states to borrow the entire amount but they have to bear the interest burden.)
“This is not acceptable to us. We want the Centre to borrow the entire amount, which is easier and more practical. Or the Centre should hike the amount the states can borrow to Rs 1.7 lakh crore at least,” Isaac told TNIE. “Initially, the Centre had proposed that it would allow the states to borrow Rs 97,000 crore. This has now been hiked to Rs 1.1 lakh. My question is if they can hike it to Rs 1.1 lakh crore, then why not hike it to Rs 1.7 lakh crore,” he said.
Isaac said none of these decisions on GST announced by the Centre were taken at the GST Council meeting. “Anyway, they (NDA-ruled states) have the majority. Then, why not take the decisions in the meeting? Of course, we will oppose, but the Centre can have their way since they have the majority. They are not willing to accept even this small opposition,” he said.
Isaac said Kerala will take a decision on moving the SC in the coming days. “I’ll have to sit down with the chief minister, who has been very busy in the last few days,” the Kerala FM said, adding that some Congress-ruled states have already contacted him to move the SC jointly. According to him, the Option 1 announced by Union Finance Minister Nirmala Sitharaman involved deferment of compensation payment beyond five years. “For this, a GST Council decision is necessary as per the Attorney General’s opinion. No such decision has been made in the council. So, this is illegal,” Isaac said.
A2.34 lakh cr This year’s total GST compensation amount