Since Centre has clarified that the only option available to states to receive the GST compensation is for them to borrow, most states, including some ruled by non-BJP parties, are likely to opt for the first of the two options offered at the recent Goods and Services Tax (GST) Council meeting.
Rajasthan chief minister Ashok Gehlot on Monday i.e. 7th September wrote to Prime Minister Narendra Modi opposing the two options saying they were in violation of the GST (Compensation to States) Act, 2017 and wrote applying 10% (nominal) growth to project a higher revenue loss because of COVID-19 is “statistically untenable” and “factually unsound”, a year after the actual growth was just 4.2%. Nominal growth in 219-20 was 7.2%.
Rajasthan chief minister Ashok Gehlot wrote, “It is the obligation of the Central Government to ensure that the states receive, without liability, the full amount of compensation, notwithstanding the shortfall in the collection of cess and that the compensation can neither be increased nor decreased without amending this Act.”
Deputy chief minister cum finance minister Sushil Kumar Modi said, “We have given in writing to the union finance ministry that Bihar will go with option one.”
