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Bommai: Centre should make up for GST revenue shortfall

The GST Council meeting on Wednesday is set to be a stormy one as states are geared up to demand their due compensation in the face of revenue shortfall.

Published: 27th August 2020 04:39 AM  |   Last Updated: 27th August 2020 04:39 AM   |  A+A-

Karnataka Home Minister Basavaraj Bommai

Karnataka Home Minister Basavaraj Bommai (Photo | EPS)

Express News Service

BENGALURU: The GST Council meeting on Wednesday is set to be a stormy one as states are geared up to demand their due compensation in the face of revenue shortfall. Karnataka, a BJP-ruled state, meanwhile, is all set to present its case strongly to impress upon the Council that timely compensation is a necessity to revive the state’s finances that is currently in a bad shape owing to Covid-19 and floods. 

The GST Council, which had initially expressed doubts over paying compensation for January-March to states, released it finally and Karnataka is looking at it as a good sign. Home Minister Basavaraj Bommai, who will represent the state at the Council meeting, told TNIE that while all options are being considered, the Centre has to ultimately compensate 14 per cent of GST revenues as per Constitutional provisions and that the state will press for it.

“If not immediately, the Union Government, at least in terms of guarantee, will have to make up for the compensation during the year. If they assure that, then we can make our own arrangements till such time. Ultimately, the GST Council has to compensate,” the Home Minister said. 

Will make case effectively: State

Bommai, however, added that whether the Centre can provide sovereign guarantee for State Government loans is still a question mark since it is unprecedented. Pointing out that the GST compensation for the January-March quarter helped the state in April and June, Bommai said it was all the more important that the Centre comes to the state’s help.

“Karnataka is all set to present its case effectively and strongly in this crucial meeting. CM B S Yediyurappa too has spoken to Finance Minister Nirmala Sitharaman on Wednesday as a prelude to the GST council meeting and impressed upon her the need of the hour,” he added.  Karnataka’s estimated compensation as per Budget 2020-2021 is Rs 16,000 crore, of which the state is yet to receive any compensation. 


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