GST Conclave: Opposition States Rue Revenue Losses, Ask Centre To Mull Ways To Compensate
The decision to implement GST in 2017 might have been premature and GST 2.0 is proof of that, says Jharkhand FM Radha Krishna Kishore.
With the GST reforms now in place, the biggest demand from states is how they will be compensated for the revenue loss incurred, said Harpal Singh Cheema, Punjab's finance minister, at the NDTV Profit GST Conclave on Tuesday.
The compensation cess was levied to compensate states for the loss that states would incur in 2017 for a period of five years. Post that, states are seeing continuous loss, Cheema said, adding that states' losses despite full compliance are an indication that there are still faults in the system.
With states, too, running multiple welfare schemes, the Centre will have to guide states till their economy stabilises, he said at the conclave, adding that states, too, wanted rate reductions but state economies need to be kept in mind.
Ever since the GST came into being, "we have seen exemptions being given 27 times, and rate reductions 15 times," he said.
Radha Krishna Kishore, Jharkhand finance minister, also said the centre should see where all the manufacturing states stand and should pay compensation to states till their own advisers are able to establish that states do not need support anymore. The decision to implement GST in 2017 might have been premature and GST 2.0 is proof of that, he added.
Manjinder Singh Sirsa, Delhi industries minister for food & supplies, said that it can't be that the states ask for rates to come down, but demand compensation. The reason states are facing losses is because of "inability to develop industry and trade". "We should see how we can improve resources and have stable policies to invite investments," he added.
