BENGALURU: Karnataka’s representative in the GST Council and Home Minister Basavaraj Bommai on Friday requested that pending dues of Rs 11,000 crore in GST compensation to Karnataka be paid immediately. Bommai, joining the 43rd GST Council meeting headed by Union Finance Minister Nirmala Sitharaman via video-conference on Friday, also requested the council to extend GST compensation to States beyond 2022.
Under the current agreement between the GST Council and states, compensation paid to state governments to offset losses arising out of implementing GST ends in 2022.Pointing to the lockdown that was necessitated because of the Covid second wave this year, Karnataka highlighted an inevitable fall in revenues.
To offset losses due to the lockdown and decreased economic activity, Bommai urged the Union Government to once again raise loans and extend them as compensation to state governments for 2021-22. After much pushback last year, the Centre had agreed to borrow under a special window to offset revenue loss for state governments, but had insisted repayment would come from GST cess collected after 2022.
Karnataka joined other states in seeking exemption on resources required for Covid and black fungus treatment. “He also stressed on the expansion of the scope of IGST exemption to cover the free supply of purchased goods. He requested that in addition to the goods already recommended, oxygen, equipment, PPE kits, medicines for black fungus should be included in the list of concessional goods,” said a statement from Bommai’s office.