HYDERABAD: The Telangana government on Monday expressed its displeasure over two decisions — the unilateral decision taken in the GST Council meeting over GST compensation and second, the special package announced by Union Finance Minister Nirmala Sitharaman.
The GST Council took a unilateral decision to pay Rs 1.10 lakh crore GST compensation to States instead of the actual loss of revenue of Rs 1.83 lakh crore.
“Normally, the GST Council takes a decision after consultations. For the first time, the Council meeting resolved to request States to take loans for GST compensation and concluded the meeting. This is a unilateral decision, Finance Minister T Harish Rao alleged after the meeting.
He reiterated the State’s demand that the GST compensation due to Telangana should be paid by the Central government. “The Centre should raise loan and pay GST compensation to Telangana,” Harish demanded. He opposed the GST Council’s decision. He also expressed displeasure over the way, Nirmala Sitharaman announced the special package earlier in the day.
“This is injustice to developed States such as Telangana, Maharashtra and Karnataka, as the special package was announced as per the formula of 15th Finance Commission,” FiHarish said here on Monday.
Harish recalled that the devolution of taxes to Telangana was reduced from 2.43 per cent to 2.13 by the 15th Finance Commission (FFC). He demanded that the capital expenditure and population should be taken as basis for the special package announced by Sitharaman on Monday.
He said that the FFC had recommended a Rs 723 crore one time grant to Telangana as it had reduced the devolution grant from 2.43 to 2.13 per cent.“The Central government did not accept this recommendation. The Centre should immediately release Rs 723 crore to TS as recommended by the FFC,” Harish demanded.
‘Pay From Gst Compensation Fund’
The Finance Minister demanded that the GST compensation should be paid from the GST Compensation Fund to the States. He demanded that the GST compensation should be paid to the States bi-monthly.
He demanded that the cess and other funds should be compulsorily deposited in the GST Compensation Fund. He pointed out that loans to be raised under Option-1 and Option-2 of the Centre for payment of compensation would be treated as other funds as per the GST Compensation Fund Act.
The Council may debate the same, Harish suggested. The difference of amount between Option-1 and Option-2 was just Rs 73,000 crore. Besides, the Option-1 amount, the Council should also pay the balance Rs 73,000 crore, he said. He supported the Chhattisgarh Minister’s argument that the loans to be raised would not come under Article 293.
Injustice to a developed State
Harish recalled that the devolution of taxes to Telangana was reduced from 2.43 per cent to 2.13 by the 15th Finance Commission (FFC). He demanded that the capital expenditure and population should be taken as basis for the special package