Deputy Chief Minister and Finance Minister Manish Sisodia said Central government’s refusal to pay Goods and Services Tax (GST) to States is the biggest betrayal in the history of federalism in India. His reaction came after a GST council meeting.
Hitting at the Union government, Sisodia said under GST, the central government was liable to give compensation to states for five years but today, they have refused to do so. States are feeling cheated right now. “The Central government has refused to take loans for any state and due to its unique status, Delhi cannot take a loan. They are showing double-standards with the people of Delhi.”
Addressing media, Sisodia said, “Central Government has failed in its responsibility in giving the GST compensation to states. When GST was rolled out, states were promised that we would be given compensation for the next 5 years with 14 percent of growth. But today, the Central Government has refused to pay by saying as per the law, due to the ongoing situation created by COVID-19, we are not liable to pay anything.”
“Today many states, including the BJP led states demanded compensation from the Center. Many states quoted the minutes of the seventh, eighth, and tenth meetings of the GST Council where it was clearly stated that the central government takes full responsibility that if the revenue of any state decreases then the central government will compensate it,” Sisodia said, “In the first two years when the central government earned extra cess of Rs. 47,000 crore which was supposed to be given as compensation, they kept it in their fund. Today when the revenue has started decreasing, they started asking AG that whether we are liable to give this amount to states or not.”
“We would have been able to manage our expenses on our own but after joining the GST regime, states had to surrender the maximum of their rights to GST council,” he said,“It was decided that if required, the central government will take a loan which will be repaid through the cess. But today, the central government refused to take a loan for any state. They gave an option to states that if you need compensation, you can take a loan from RBI. We will ask RBI to provide you loans.” Sisodia said, “Due to the unique status of Delhi, our government cannot take a loan. They are showing double-standards with the people of Delhi", he added.
Sharing details about Delhi, the finance minister said that in the last four months, we have collected Rs. 7,000 crore lesser tax. “If we look at the entire year, we have a shortfall of Rs. 21,000 crore. The central government should take a loan on our behalf as we also need to pay salaries to our doctors, teachers, engineers, DTC, and other employees.”
He added, “This is the biggest betrayal of the central government in the history of federalismbin India.”
While praising the whole idea of GST,Sisodia said, “I am not against GST. GST is a good idea but the central government has failed to implement it properly. If they would have implemented it properly, the states would not have to beg like this. There are many problems with GST that were supposed to have been fixed by now, whatever evasion was taking place under the VAT/Sales tax regime is still continuing in GST regime. So first the Centre has failed in implementing GST reform properly, and they are now betraying the states and running away from their responsibility in giving GST compensation”.