Seven Opposition-ruled states and Union Territories Punjab, Delhi, Puducherry, Kerala, Madhya Pradesh, Rajasthan and Chhattisgarh made a forceful representation to Union Finance Minister Nirmala Sitharaman Wednesday demanding pending compensation under the Goods and Services Tax (GST) regime, with some saying it’s an embarrassment to keep asking for money due to them and Kerala warning it may even approach the Supreme Court.
The meeting with Sitharaman comes days after the GST Council informed states that the GST and compensation cess collections in the last few months had become a “matter of concern”. States, in their meeting with Sitharaman, highlighted that as much as Rs 50,000 crore was lying “unutilised” in the compensation fund. The meeting was attended by ministers of Punjab, Rajasthan, Delhi, Madhya Pradesh and official representatives of Puducherry and Kerala.
Punjab Finance Minister Manpreet Singh Badal said compensation was pending for four months now. “Not only August-September, but compensation is also now due for another two months, October-November…we can’t close jails, hospitals, social security pensions, schools, colleges, canals. States have a huge responsibility and compensation is part of law, Government of India is under obligation to pay,” he said after the meeting.
In a late evening tweet, Kerala’s Finance Minister Thomas Isaac said, “Deeply disappointed with the outcome of the meeting of Union FM and State FMs delegation. No objection to a GoM. But states’ constitutional right of GST compensation is non-negotiable. If necessary Kerala government will approach the Supreme Court under article 131.”
Article 131 of the Indian Constitution deals with disputes between states and Centre under the jurisdiction of the Supreme Court. In January, the GST Council had formed a ‘Group of Ministers on Analysis of Revenue from GST’, headed by Bihar’s Deputy Chief Minister Sushil Kumar Modi. A committee of officers from states and Centre was also constituted in October to suggest measures to augment revenues under GST.