States have been asking the centre to pay goods and services tax (GST) compensation
Haryana Deputy Chief Minister Dushyant Chautala has requested the centre to pay the state's goods and services (GST) compensation of Rs 5,840 crore at the earliest that has been pending for the last four months, according to a statement on Friday.
While participating in the 41st GST Council meeting on Thursday through video-conferencing, the Deputy Chief Minister requested the centre to provide maximum financial support to Haryana, as the COVID-19 pandemic has affected the state's economy.
He said the loss of revenue should be compensated to the states even after the period of five years of GST, in 2022.
Mr Chautala said Haryana is a leading state in manufacturing and exports. He added before the GST regime, "the state used to get maximum revenue in the form of tax on products". The revenue collection across the state has been affected after the implementation of the GST system, he said.
The states where products are being sold are getting more benefits of GST, the deputy Chief Minister added. The revenue of the state has also been affected due to the COVID-19 pandemic, he said during the meeting.
Mr Chautala drew the attention of the GST Council towards the provisions of the constitutional amendments where parliament is entrusted with the responsibility of ensuring payment of compensation to the states.
"Parliament should come forward regarding this matter," he said. He also underlined that the council must focus on raising revenues as a long-term solution to the problem of revenues deficit.
Dushyant Chautala, a Jannayak Janta Party leader, also requested the GST Council to hold a meeting of the council where participants are present, "so that the representatives of all the states can present their views in a better and effective manner".
While Haryana has a BJP-JJP coalition government, amid a chorus by non-NDA ruled states for compensation of GST revenue shortfall, the centre on Thursday told states that the estimated deficit of Rs 2.35 lakh crore this financial year can be bridged by borrowing.
The centre made a distinction between revenue lost due to implementation of the GST and the economic slowdown arising out of the COVID-19 crisis. The government said its legal obligation is only to compensate states for losses arising out of the GST roll-out.