Government today urged the Rajya Sabha to pass the GST bill expeditiously to enable states get a share of the Service Tax which is not shared under the provisions of 14th Finance Commission.
“As per the 14th Finance Commission, service tax is not shared with states. The earlier you pass the GST, the better it is for states so that they get a share in the Service Tax,” Finance Minister Arun Jaitley said in reply to questions.
Asked if the Centre plans to increase the share of states from the current 42 per cent to 50 per cent, he said “till the year 2020, it will be 42 per cent”.
Mr Jaitley also said in totality, the states would get Rs. 1,88,000 crore more funds during the last year ever since the 14th Finance Commission was implemented.
“If you total the funds that states got after taking the difference between what they got in 2015-16 when the 14th Finance Commission was implemented and what they got in 2014-15 when 13th Finance Commission was applicable, the states got Rs. 1,88,000 crore more during the past year,” he said.
Mr Jaitley also said “the net that every state gets under the 14th Finance Commission is much, much higher than every state got under the 13th Finance Commission.”
He said the Finance Commission fixed the criterion for distribution of funds after talking to states and each Finance Commission set different criteria.
The Centre, he said, also needed resources as some funds over and above 42 per cent are given by it to the states to finance welfare schemes from its share of 58 per cent.
The Finance Minister said the 14th Finance Commission heard out states and on the basis of their financial health, decided the criteria based on the demographic profile, population and income inequality, with a new criteria of forest cover being added this time.
On some schemes where some states have suffered, the Centre had constituted a committee of chief ministers who recommended that some schemes should be fully sponsored by the Centre and some others be adopted by the states, he said, adding that in some schemes, the Centre would support to the extent of 60 per cent and states 40 per cent.
“But each of the states will get more funds in totality after the implementation of Finance Commission,” he said.
Asked about Tamil Nadu, the Minister said “the net amount that the state received from 2015 to 2020 has by itself increased by 122 per cent. There is a significant increase that has taken place. Though in terms of percentage, the allocation there is a slight decline.”