HYDERABAD: Finance Minister T Harish Rao on Friday urged the Union Finance Minister Nirmala Sitharaman to release Rs 2,800 crore dues to the State under unapportioned amount of IGST, GST compensation of Rs 3,975 crore for May and June and also the devolution of taxes for June immediately.
Rao suggested that the GST Council borrow money to give GST compensation to the States.
He participated in the 40th GST Council meeting through video-conference from Hyderabad on Friday.
Expressing gratitude to the Union Finance Minister for reversal of IGST amount of Rs 1.76 lakh crore to States from the Consolidated Fund of India, which is a longstanding demand of Telangana.
He requested the Union Minister to release the amount pertaining to Telangana. The amount expected in this connection is Rs 2,800 crore, Rao said.
Rao said that the unapportioned IGST amount of Rs 1.76 lakh crore during 2017-18 is to be shared among States, which is a longstanding demand of Telangana.
The amount expected for TS in this connection is Rs 2,800 crore. Rao also wanted the Centre to release the GST compensation to the State for April and May, as the State has been facing severe revenue shortfall due to Covid-19.
“Any shortfall in release of GST compensation will adversely affect many programmes implemented by the State. Telangana is a progressive State and implementing many development and welfare activities. The assured GST revenue with growth of 14 per cent is taken into the Budget as it was promised by the Centre and any failure in fulfilment of this assurance will lead to a difficult situation in implementation of many programmes,” Rao told the Union Finance Minister.
He said there was a huge fall in revenue in other sectors also and in such a situation, not releasing compensation would aggravate the economic crisis. State at present was giving employees only part of their salaries due to lack of funds, he explained. “GST Council may borrow to meet the commitment given by the Centre for payment of GST compensation to the States, if necessary by amending the provisions of the Act,” Rao suggested.
TS performed well
Harish Rao said that due to the progressive policies, Telangana performed well in revenue front and was one of the few States which had taken little GST compensation from the Centre since the introduction of GST i.e., July, 2017. “When the need for compensation arises and if Centre does not come forward to fulfil its obligation, it will be very disappointing to the State,” Rao said.
He also urged the Minister to release the devolution funds for the State for June 2020 and reiterated the request seeking release of GST compensation of Rs 3,975 crore for April and May 2020. Rao said the State is not getting any revenue on account of being revenue deficit and the 15th Finance Commission is also not favouring the State. He recalled how the FFC reduced the State’s share in the devolution.
Top in revenue performance
Harish Rao explained in the GST Council meet that under the dynamic leadership of Chief Minister K Chandrasekhar Rao, the State stood first in the country, barring few North- Eastern States in revenue performance, by recording least revenue gap of 11.5 per cent for the year 2019-20.
Telangana has achieved highest revenues since the implementation of GST in July 2017 and did not take any compensation during 2017-18 and 2018-19, he said.