Clear GST dues to states,Sonia Gandhi to Centre

Congress president Sonia Gandhi has criticised the centre over not clearing goods and services tax that it owes to state governments, putting them in severe financial strain amid the coronavirus pandemic."In the meeting of the standing committee of finance on August 11, the Finance Secretary clearly said the central government is not in a position to pay their mandatory compensation of 14 per cent for the current year. This refusal to compensate states is nothing short of betrayal on the part of the Narendra Modi government, betrayal of state governments and people of India," Mrs Gandhi said on Monday  at a virtual meeting of chief ministers.

Under the law that governs GST, states have been guaranteed payment for loss of revenue in the first five years since the GST came into force on July 1, 2017. This means states have been promised compensation for any revenue shortfall till 2022 - if they fell below 14 per cent annual growth since July 2017.

But most states have been complaining of not getting enough GST compensation and that too on time, putting them at risk of massive revenue deficit running into thousands of crores. Punjab, for example, is likely to see a revenue deficit of ₹ 25,000 crore this year. GST compensation being paid to states on time according to laws passed by parliament is crucial. But it is not happening. Dues have accumulated and finances of all the states are badly affected," Mrs Gandhi said.