Opposition Parties protest outside Parliament, demand clearance of GST dues

On the fourth day of the Monsoon Session, the opposition protested in front of the Mahatma Gandhi statue in the Parliament premises demanding immediate clearance of Goods and Services Tax (GST) payments to states. Holding posters and banners, MPs of several opposition parties demanded early payment of Goods and Services Tax (GST) to states amid a shortfall of revenue.

Raising the slogan-- "We want compensation of the GST," parties like the Telangana Rashtra Samithi (TRS), Trinamool Congress (TMC), Dravida Munnetra Kazhagam (DMK), Rashtriya Janata Dal (RJD), Aam Aadmi Party (AAP), Nationalist Congress Party (NCP), Samajwadi Party and Shiv Sena stood outside the Parliament premises threatening to take to streets if the dues were not cleared. 

Rs 1.51 lakh crore due to states 

As per Minister of State for Finance Anurag Singh Thakur, the GST collection during April-August declined on account of COVID-19 induced lockdown. Owing to this, the compensation due to states stands at over Rs 1.51 lakh crore. The provisional GST compensation due to states/UTs for 2020-21 was highest for Maharashtra at Rs 22,485 crore, followed by Karnataka (Rs 13,763 crore), Uttar Pradesh (Rs 11,742 crore), Gujarat (Rs 11,563 crore) and Tamil Nadu (Rs 11,269 crore).

Read: Sanjay Raut Asks, 'How Can We Fight COVID-19 Without Funds?'; Demands Release Of GST Dues

Read: Political Muscle Being Flexed To Make States Agree To GST Options: Amit Mitra

Centre suggests two options

The Finance Ministry has rejected the demand of multiple states and proposed two options for meeting the shortfall in GST compensation. First, it suggested that states could borrow Rs.97,000 crore (the revenue shortfall arising on account of GST implementation and not taking into account COVID-19) with the entire principal and interest repayment of the debt to be met through cess collection in subsequent years. Moreover, the states have been allowed to borrow an additional 0.5% points under the FRBM Act.

However, if the states opt to borrow the entire amount of Rs. 2.35 lakh crore, only the principal amount shall be repaid from the cess. In such a scenario, the states will have to bear the interest burden. Several CMs such as Delhi CM Arvind Kejriwal, Jharkhand CM Hemant Soren, West Bengal CM Mamata Banerjee, Tamil Nadu CM Edappadi Palaniswami, Kerala CM Pinarayi Vijayan, Telangana CM K Chandrasekhar Rao, and Chhattisgarh CM Bhupesh Baghel have written to PM Modi urging a rethink on the GST compensation options.

Read: Odisha Cabinet Approves Proposal To Amend State GST Act To Make Collection Process Simpler

Read: GST Compensation Due To States At Rs 1.51 Lakh Cr, Maharashtra Leads

(With Agency Inputs)