States should stand firm, reject Centre's options on GST compensation cess: Chidambaram

Senior Congress leer P Chidambaram on Tuesday complimented states that rejected two options given by Centre to bridge gap in GST compensation cess and asked m to stand firm at next meeting of GST council on October 12.

former finance minister said states should t borrow as liability to provide Goods and Services Tax (GST) compensation as well as onus to find resources fall on Centre.

"I compliment 9-10 states that stood firm and rejected two options given by central government to bridge gap in GST compensation cess,"ded former finance minister.

At its meeting on Monday, GST Council failed to reach a consensus on ways to compensate states for loss of tax revenue. panel will meet again on October 12 to thrash out state compensation issue, Finance Minister Nirmala Sitharaman said after a marathon eight-hour meeting.

council was divided on political lines, with 10 states ruled by n-BJP parties opposing Centre's proposal of states borrowing to meet shortfall in receipts. state compensation issue appears heed for voting in council, with option chosen by majority being implemented.

Sitharaman said 21 states accepted one of two borrowing options suggested by Centre but 10 did t agree.

When GST was introduced in July 2017, states were promised a 14-per cent incremental revenue over ir last tax receipts in first five years.

This was to be done through a levy of a cess or surcharge on luxury and sin goods, but collections on this count have fallen short with slowdown of ecomy since last fiscal.

To make up for this, Centre has suggested that states can borrow against future compensation receipts.

(IM CREDITS:Twitter/@PChidambaram_IN)

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