THIRUVANANTHAPURAM: The state government is planning to approach the Supreme Court against the delay on the part of the Centre in releasing the GST compensation dues, Finance Minister Thomas Isaac has said.
He said the state’s fiscal position would further worsen if the Centre refuses to disburse the due amount. “Till December, the Centre owes Rs 3,200 crore to the state as compensation. The state has huge financial expenses to meet this month. Various projects will have to be stopped if the compensation amount is delayed further,” Isaac told reporters.
He said the finance minister had cold-shouldered the state’s demand for immediate disbursement. “The Union minister had said the GST council would meet to discuss the issue. But we cannot wait for more. The state will approach the apex court against the delay. We have already sought legal advice in this regard,” he said.
The state plans to move the Supreme Court under Article 131 of the Constitution, which empowers the apex court to resolve issues between the Central Government and the states. The Centre has suggested discussing the issue at the council meeting on December 17 and 18.
According to the Taxes Department, the state is yet to receive Rs 3,200 crore as compensation dues since August. The Centre is bound to pay compensation to states for five years if their GST revenue does not grow by at least 14 per cent. The deficit amount is paid bimonthly.
Isaac said the delay in payment could be part of a larger plot as Finance Commission chairman N K Singh had called for a rethink on discussing GST compensation to the states in the previous GST council meeting.
“Kerala was the first to oppose this suggestion. Other states, including BJP-ruled states, joined us,” Isaac said. He claimed that the state government does not waste money for unnecessary expenses. He also rubbished speculation that the government would raise taxes to resolve the crisis.
If the Centre does not distribute the compensation dues this month, the state will have to further tighten the treasury restrictions. The state can opt for market borrowings only in January, he said.