New Delhi: The delay in payment of GST compensation by the centre has been a major grouse of the states ever since the new tax regime came into existence across the country. After vociferous protests, it was only last month that the central government released Rs 35,298 crore to states to make up for the loss of revenue due to the rollout of the Goods and Services Tax (GST).
In order to obtain further pending dues, the CPM-led Left Democratic Front (LDF) government in Kerala might hold discussions with the Congress national leadership as it looks for a way out of the financial crisis grappling the state.
While pointing out that the Centre is yet to give the state government its GST dues, Kerala Finance Minister T M Thomas Isaac said that there was no way out until other Congress-ruled states too cooperated.
Isaac had raised the issue during a sub-committee meeting of the finance ministers held on Saturday. But even he is not optimistic that the state government would receive the pending money soon. In such a scenario, Kerala is considering its next step with the backing of the Congress.
Kerala has to receive Rs 1,600 crore as GST compensation for December alone. However, the Centre said that it can give only Rs 4,524 crore of the Rs 6,866-crore tax share for the three months as per the Finance Commission's recommendations.
The meet was chaired by Bihar Deputy Chief Minister Sushil Kumar Modi, who is the convenor of the sub-committee.
When GST was rolled out on July 1, 2017, a legislation promised that states would be compensated for the loss of revenue as the new tax regime subsumed state taxes such as VAT.
GST collection target raised
The Kerala government is also in a fix as the Union Finance Ministry has reset the targets for GST collections. The revised targets for the state are Rs 1.15 lakh crore for February and Rs 1.25 lakh crore for March. This could be challenging for the state as the earlier set targets were not met.
The GST collection estimates were Rs 1.1 lakh crore for December, and Rs 1.15 lakh crore for January. However, the December collection was all of Rs 1.03 lakh crore.
The only solace for the Kerala government is that the GST collections, which had been unstable for months, crossed the one-lakh-crore mark consecutively.
Demands for e-way bill for gold
At the meet Kerala government demanded the introduction of e-way bill system for gold sales. "The absence of such a system is leading to large-scale tax evasion when gold is transported to the state. Instead of getting Rs 650 crore, Kerala is just getting Rs 150 crore," Isaac said during the sub-committee meet.
Isaac later told the reporters that the issue of raising the pension age of state government employees was not discussed as it was for the LDF to take a decision.
