Centre has no clue on how to bridge GST compensation, trust deficit: P Chidambaram

Senior Congress leader and former finance minister P Chidambaram on Monday criticised the Centre over the ongoing GST compensation issue.

While 20 states have agreed to the Centre’s proposed borrowing mechanism to meet the shortfall, several opposition-ruled states are expected to object to it at the 42nd GST Council meeting today. The meeting has already started.

“States must stand firm on the rejection of the two meaningless options offered by the Centre and insist that the Centre should find the money and pay the promised compensation,” Chidambaram said.

Chidambaram went on to say that the outcome of the GST Council meeting today will be a “test” for the central government’s adherence to law and it promises.

Also Read | GST Council meeting to see stormy session as opposing states to raise compensation issue

“The outcome of the GST Council meeting today will be a test for the central government’s adherence to law and to its promises,” the former finance minister said.

Chidambaram said there are two deficits that the Centre is required to meet — GST compensation and trust deficit.

“The Centre has no clue about how to bridge either deficit,” he added.

At today’s Council meeting, states rules by the opposition-ruled states are expected to reject the Centre’s proposed measure to make up for the GST shortfall.

The Centre had given states two borrowing options for the same and said there is not enough revenue generation to pay compensation cess to states.

Meanwhile, Rajya Sabha MP Derek O’Brien also slammed the Centre over the issue of unpaid compensation cess.

“States gave up 70% of taxation on Central promise. But Centre refusing funds. Ignores the Constitution. Why?” O’Brien questioned.

Also Read | Revenue collection for GST at Rs 95,480 crore in September





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