GST Compensation to States: Tamil Nadu CM Edappadi Palaniswami Writes to PM Narendra Modi, Reiterates 'Centre Should Advance Funds to the GST Compensation Cess Fund'
Tamil Nadu CM Edappadi K Palaniswami on Monday wrote to Prime Minister Narendra Modi over Goods and Services Tax compensation of States and expressed his concerns on the two options offered to States after 41st GST Council Meeting.
Chennai, August 31: Tamil Nadu CM Edappadi K Palaniswami on Monday wrote to Prime Minister Narendra Modi over Goods and Services Tax compensation of States and expressed his concerns on the two options offered to States after 41st GST Council Meeting. Palaniswani also reiterated the State government's stance that the Centre should advance funds to the GST Compensation Cess fund if need be by borrowing in the market and service the debt by an extension of the compensation cess.
Expressing his concerns on the two options for GST compensation, CM Palaniswami said, "In this context, I am very concerned about the two options that have been offered to States after 41st GST Council Meeting held on 27th August 2020. My first concern is that in both the options suggested by the GoI, the States are being required to borrow from the market to make good the shortfall in compensation due. This is administratively difficult to implement and more expensive. Further, the reason being cited for such an arrangement are not persuasive." GST Council Meeting Highlights: 'Act of God' Behind Economic Slump, Says FM Nirmala Sitharaman, States Given 7 Days to Revert on Compensation Gap Issue.
Earlier on Thursday, Union Finance Minister Nirmala Sitharaman, while addressing the media after 41st GST Council Meeting, suggested two options before states. She had said, "Two options were placed before states, we told them that we will facilitate talking with RBI and help to get G-security linked interest rates so that each state does not have to struggle for loans." She had also given seven full working days to states to deliberate on the options and get back to the GST Council on filling the compensation gap of Rs 2.35 lakh crore.
(The above story first appeared on LatestLY on Aug 31, 2020 01:40 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).