CM Bhupesh Baghel, in his letter to the states, shared the disadvantages of the closure of GST compensation, said, “We should talk to the Center together”.
Raipur: Chhattisgarh CM Bhupesh Baghel on Monday written a letter to the chief minister of 17 states to discuss Centre’s decision to discontinue the GST compensation after June this year. The CM, hrough the letter, has discussed the losses that will be faced by all the states due to this move.
He has sent letters to the CMs of Orissa, Madhya Pradesh, Uttar Pradesh, Gujarat, Jharkhand, Rajasthan, Punjab, Bihar, West Bengal, Haryana, Andhra Pradesh, Hyderabad, Tamil Nadu, Karnataka, Kerala, Telangana and Delhi. He has urged to make a joint request to the central government to continue the GST compensation for ten years so that the revenue of the states can be saved from huge loss, otherwise the centre should create an alternative arrangement.
The Chhattisgarh CM has talked about three key points; first point being that in the pre-budget meeting under the chairmanship of the Union Finance Minister on December 29 in New Delhi, chief ministers and state finance ministers present in the meeting expressed deep concerns over the closure of GST compensation after June this year and these state CMs and finance ministers, hoping for a positive response from the central government, had requested to extend the GST compensation for five years in the meeting itself.
In the second key point, the CM has discussed the issues that will be faced by manufacturing states like Chhattisgarh and Andhra Pradesh. “These states will face huge financial losses if GST compensation is discontinued. Chhattisgarh, being a manufacturing state, our contribution to the growth of the country’s economy is much higher than the consumer states which have benefited from the GST regime due to higher consumption of goods and services,” he further said in the letter.
In the third key point, Bhupesh Baghel has pointed out that after the introduction of the GST regime, the independence of the states on tax policy has been greatly reduced. “Apart from commercial tax, the states are left with no option but to increase the revenue in other items of tax revenue. Therefore, in order to recover from the impact of Covid-19 on the state’s economy and get the due benefits of GST compensation, the states should request the central government to implement the continuation of this existing mechanism of compensation of GST, at least for the next five years,” he added in the letter.