Chief Minister Hemant Soren wrote to Prime Minister Narendra Modi today seeking his intervention in matter of huge GST dues of State that Centre has kept on hold. In his letter CM stated, “I am writing this after being informed that Government of India has expressed its inability to give us compensation for loss of GST revenue suffered by Jharkhand in the financial year 2020-21. We have so far registered a loss of nearly Rs 2500 crore in current fiscal but no compensation has been released by GoI.”
“In the GST council meeting held recently, Union Finance Minister, instead of giving some firm commitment, unbelievably decided to thrust two unilateral and arbitrary options which require states to borrow crores of rupees.
Three years back no one would have imagined that GoI would take such a stance. This act of sovereign default to compensate States for GST losses runs against very spirit of cooperative federalism and is symptomatic of withering trust between Centre and States,” he stated.“In your address to nation you had portrayed GST as a great example of cooperative federalism that would herald inclusive growth of Nation. I echo your sentiments but you would agree that India as a nation can grow only if it’s constituent States also grow and become self-reliant.
But, reluctance of the Central Government to fulfill its -constitutional obligations regarding GST compensation goes against interests of States and spirit of cooperative federalism,” the CM said.
“I need not emphasize that the GST regime could be implemented only because we, in larger interest of nation, agreed to weaken the very backbone of State's own resources and consented to forgo our Constitutional powers of taxation. We were however given solemn assurance by GoI to compensate States for losses they would suffer for next 5 years. But, it has been just 3 years of GST journey and we find ourselves deserted.
Reluctance and inability of the GoI to give full compensation to States is a betrayal of the commitment it made in the Union Parliament and also in all council meetings held so far,” stated CM.
Soren further wrote, “Jharkhand, being manufacturing heavy industries based State with less consumption, was bound to suffer losses in GST regime.
Even then Jharkhand State Assembly consented to its implementation. Not only this. Jharkhand contributes to compensation fund a cess of nearly Rs 5,000 crore from mineral sector alone. What we get in return is just a paltry sum of nearly Rs 150 crore as monthly compensation.