17.12.2022: Centre owes GST compensation dues of ₹780 cr. to State: Balagopal

Finance Minister K.N. Balagopal on Friday cleared the air on the goods and services tax (GST) compensation amount pending with the Centre, indicating that it stands at ₹780 crore.

Mr. Balagopal had pegged the dues, as of June, at ₹1,548 crore in a representation given to Union Minister Nirmala Sitharaman in November. Ms. Sitharaman, replying to a question in Parliament recently, stated that Kerala was owed only ₹780.49 crore. 

In a Facebook post, Mr. Balagopal said the Centre’s assurance that the GST compensation dues would be settled soon did not justify the neglect shown to States such as Kerala. 

“Certain sections are now claiming that since the Centre owes Kerala only ₹780 crore, it cannot be blamed for denying the State’s rightful share. In reality, Kerala stands to be deprived of ₹12,000 crore annually with the discontinuation of GST compensation,” Mr. Balagopal said.

Additionally, the revenue deficit grant fell by ₹6,700 crore this year. The State’s borrowing limit also dipped by ₹3,140 crore this fiscal due to the Centre’s decision to consider the guarantee provided to the Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Ltd (KSSPL) as State debt, he said. 

“State governments bear 64% of the public expenditure, but they get only 37% of the tax revenues. This being the case, States, including Kerala, have been demanding that the GST revenue share of States should be hiked from 50% to 60%,” he said.

Source: The Hindu 

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