Kerala to move SC if there are any issues in GST compensation, says Thomas Isaac

On Tuesday, Kerala Finance Minister Thomas Isaac said that the state will approach the Supreme Court with all the nine states opposing Centre's two borrowing options for GST compensation if there is an issue. This statement from Isaac comes after no consensus was achieved between the Centre and the various states on its two borrowing options. 

Addressing the media, Isaac said that the GST Council meeting concluded without they arriving at a consensus for the second time in two weeks on Monday, as nine states were not ready to accept both the options and the minister of Maharashtra did not join the meeting.

"Kerala has already declared that it will approach the Supreme Court if there are any issues. Kerala will speak with other states in the coming days. If Kerala goes to Supreme Court, it will be all nine states together. This year's compensation to states is Rs 2.3 lakh crore, and of this, states are asked to borrow Rs 1.1 lakh crore. Kerala has strongly argued that compensation should not be postponed to the future. If such compensation is to be deferred beyond five years, the GST Council must formally decide. That is what the law dictates. That is what (is) the Attorney General's opinion. No such decision has been made in the Council," he stated.

Taking to Twitter, he also mentioned that Finance Minister's announcement about permitting 21 states to borrow as per option one (proposed in 41st GST council meeting) is illegal, as no such decision was taken in the Council meeting. He added that Finance Minister's move of not proposing the decision in the Council, but announcing the same in the media is "unfortunate".

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 'No consensus in GST council meet'

Addressing the media after the 42nd GST Council meeting, Finance Minister Nirmala Sitharaman stated that no consensus was achieved between the Centre and the various states on its two borrowing options. She said that the Centre was open to facilitate loans for states, as several states had opted for option 1 to borrow at a reasonable interest rate. As many as 21 states -- which are BJP ruled or have supported it on various issues -- have opted to borrow Rs 1.10 lakh crore to meet the compensation shortfall.

She said, "We are open to anyone (State) who wants us to facilitate any loan. A lot of people have chosen Option 1, and some will approach us tomorrow morning. We are ready to deal with it. We were not able to arrive at a consensus. I appealed to all states, we have to quickly give answers to states who are fighting COVID-19 on the ground and who want money in their hands."

READ: FM Sitharaman says 'No consensus on states' borrowing' after 42nd GST Council meet

(With Inputs from ANI)