Asserting that contentious issues need to be resolved first, the Punjab Government today said the Centre should ensure compensation of Rs 3,000 crore of revenue loss to the state which is likely to occur after the implementation of Goods and Services Tax(GST).

“The Centre must ensure that we will get full compensation of any revenue loss which is expected to occur with the roll out of GST,” Punjab Finance Minister Parminder Singh Dhindsa said here today.

Dhindsa, who attended the recent meeting of Empowered Committee of States’ Finance Ministers held in Mussoorie (Uttrakhand), feared that the state would face revenue loss of Rs 3,000 crore as taxes like purchase tax, Rural Development Fund and infrastructure development cess levied on foodgrain would be subsumed within the GST.

“We have strongly raised the issue of revenue loss in the Empowered Committee meeting that our revenue should be secured,” Dhindsa said.

He also said other states like Madhya Pradesh and Haryana also sought revenue loss compensation on account of subsuming of taxes on foodgrain.

“How the dual control will work for levying taxes…It will impact trading community…what will the RNR (Revenue Neutral Rate) and what will be its viability…such questions need to be answered first,” said Dhindsa.

Notably, the neighbouring state Haryana has also asked the Central government to expedite the release of the withheld amount of Rs 7,100 crore, on account of the Central Sales Tax (CST) with state losing nearly Rs 3,000-Rs 3,500 crore every year on account of the reduction in the rate of CST.

Anticipating demand of extension in tax packages by hilly and north east states in upcoming meeting, Dhindsa has made it clear in the Empowered Committee meeting that Punjab would not like that the committee supports this demand.

“There is a possibility that states like Jammu and Kashmir, Himachal Pradesh, Uttarakhand and other north east states will demand extension in tax packages granted by Centre and would want this demand be supported by Empowered Committee. We have made it clear that this demand should not be supported at all by the committee,” he said.

Punjab has been claiming the exodus of state industry to hilly states because of tax packages.