"There are hurdles in the payment of GST compensation by Central Government to the States and I have requested the PM to intervene and advise Finance Ministry to uphold the spirit of Cooperative Federalism in practice.”
This is with reference to the text of Jharkhand Chief Minister Hemant Soren’s letter dated August 4, 2020, to Prime Minister Narendra Modi. In his letter, Soren has sought to show hurdles in payment of GST compensation by the Central government to the states.
“I am writing this after being informed that the Government of India has expressed its inability to give us compensation for the loss of GST revenue suffered by Jharkhand in the financial year 2020-21. We have so far registered a loss of nearly Rs 2,500 crore in the 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 unilateral and arbitrary options which require states to borrow crores of rupees," he added.
More, Soren thinks that the state of Jharkhand is a manufacturing/heavy industries based state with less consumption. It was bound to suffer losses in the GST regime. “Even then Jharkhand State Assembly had consented to its implementation”, Soren stated.
"Not only this, but Jharkhand also contributes to compensation fund in the form of a cess of nearly Rs 5,000 crore from the mineral sector alone. What we get in return is just a paltry sum of nearly Rs 150 crore as monthly compensation. And now we are being asked to borrow at a time when the state is hard-pressed to fulfill salaries of Government servants," Soren wrote in the letter.