CM Baghel requests 17 CMs to jointly urge Centre to continue GST compensation

CM Baghel requests 17 CMs to jointly urge Centre to continue GST compensation
Chhattisgarh Chief Minister Bhupesh Baghel in his letter to the states, shared the disadvantages of the ending of GST compensation and said that “We should talk to the Centre together.”

In regard to Central Government’s decision to discontinue the GST Compensation after June 2022, Chief Minister Baghel has written a letter to the Chief Ministers of 17 states to discuss this issue.

Through his letter, Baghel has discussed the losses that will be faced by all the states due to this decision taken by the Centre.

Baghel has sent letters to the Chief Ministers of Orissa, Madhya Pradesh, Uttar Pradesh, Gujarat, Jharkhand, Rajasthan, Punjab, Bihar, West Bengal, Haryana, Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, Telangana and Delhi.

In the letter, Baghel has requested the CMs of 17 states to make a joint request to the Central Government to continue the GST compensation for 10 years, so that the revenue of the states can be saved from a huge loss, otherwise, the central government should create an alternative arrangement.

Baghel talked about three key points: the first point was that in the pre-budget meeting under the chairmanship of the Union Finance Minister on December 29 in New Delhi, CM and state finance ministers present in the meeting expressed deep concerns over the closure of GST Compensation after June 2022.

Hoping for a positive response from the central government, they had requested to extend the GST compensation for five years in the meeting itself.

In the second key point, he discussed the issues that will be faced by manufacturing states like Chhattisgarh and Andhra Pradesh. He further added that these states will face huge financial losses if GST Compensation is discontinued and added that there would be a loss of around Rs 5,000 crore in the coming financial year only to Chhattisgarh.

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He added that other states will also have fewer revenue receipts in the coming financial year which will make it very difficult for the states to arrange money for public interest works and development works.

In the last point Baghel 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 on other items.

He added, 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 for GST, at least for the next five years.

Baghel exuded confidence that the states would agree to his point of view and together would make a common request to the Centre to agree on this issue. (ANI)

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