THIRUVANANTHAPURAM: Kerala will hold talks with non-BJP ruled states to arrive at a consensus on the fund mobilisation for GST compensation payment, Finance Minister TM Thomas Isaac has said.Addressing mediapersons after attending the GST Council meet on Thursday, he said states have been given two options and seven days to reply. “Kerala opposed Centre’s argument that GST compensation was to be assessed on the basis of normal losses when compared to the previous year and to separate Covid-related revenue fall,” Isaac said.
“The classification of compensation amounts as normal or due to Covid-19 is not legal. The legal advice by the Attorney General too does not mention such a classification. Kerala will not accept this,” he said. A sum of `3 lakh crore is required to pay compensation to all states of which only `70,000 crore can be released from the compensation cess. To mobilise the remaining `2.3 lakh crore, Isaac said, the Centre has made two suggestions.
One is that it will borrow half the amount and the borrowing limit of states, present 5% of the GSDP, will be raised by 0.5%. “But this will help states to mobilise only `50,000 crore,” he said. The second option is to allow states to borrow the entire `2.3 lakh crore. “In that case, the borrowing limit of states has to be hiked by at least 1.5 per cent. But the Centre did not make it clear,” he said. Isaac said he will consult with the chief minister on the state’s position. Also, Kerala will work for a consensus among non-BJP ruled states.
Isaac argued in the council that the Centre should borrow the entire sum and distribute it among the states as the Centre can mobilise funds at lesser interest than the states. The second option is more attractive. If left with the two options, the state is likely to support the second but with some modifications, sources in the Finance Department said.
State confiscates gold worth F1.96 crore
T’Puram: The GST department confiscated 3.8kg of gold worth D1.96 crore recently after the government decided to take tough action against gold smuggling. This is first case of confiscation, said Finance Minister Thomas Isaac on Thursday. “The gold was returned after the party concerned paid the actual value of Rs 1.96 crore. The confiscation is in the wake of an order issued by the Gujarat High Court in a similar case there,” Isaac said.