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Maharashtra demands immediate refund of GST compensation; Eight non-BJP states may move Supreme Court

IT News
Mumbai, Dec 12

Maharashtra government in a letter to Union Finance Minister Nirmala Sitharaman, has sought immediate release of Rs 15,558.05 crore comprising Goods and Services Tax (GST) compensation up to November 2019 from the Centre.
As per copy of the CM’s letter made available to media by CM office on late Wednesday evening, “The pending dues include Rs 6946.29 core of tax devolution and Rs 8611.76 crore towards GST compensation”.
“As per the Union budget 2019-20, the tax devolution to Maharashtra was Rs 46,630.66 crore which was 11.15 per cent more than Rs 41952.65 crore received by the state during 2018-19. But, the state received only Rs 20254.92 crore till October 2019 (25.53 per cent less compared to the budget estimate of 2019-20).
The CM also expressed fear of a shortfall in GST collections compared to the benchmark growth of 14 per cent due to the slowdown in the economy. “During the current financial year, we have received Rs 5635 crore as GST compensation for the first four months only. However, an amount of Rs 8611.76 crore is due towards the GST compensation up to November 2019.
“The state is also suffering due to the shortfall in tax devolution. Timely release of GST compensation and tax devolution amount will help my state to manage finances efficiently,” the CM stated.The letter further stated that Integrated GST (IGST) settlement was done during 2017-18 based on tax devolution formula of the Finance Commission, instead of the formula adopted for such settlement. “As per the latest CAG report, for the year ended March 2018, the IGST settlement for many transactions is not happening,” it stated.
Thackeray heads a coalition government of the Shiv Sena, NCP and Congress, which came to power last month. The BJP-led NDA government headed Maharashtra prior to the October 21 assembly polls.
In the meanwhile, amidst muted GST revenue growth and worries over delayed allocation of compensation cess, a few state governments are considering legal recourse against the Centre if their dues are not cleared immediately. States like Kerala, West Bengal, Punjab, Delhi and Chhattisgarh, Madhya Pradesh, Rajasthan and Union Territory of Puducherry — all non-BJP states — are planning to knock at the door of the Supreme Court if their concerns are not addressed.
Finance ministers and representatives of these states had met Sitharaman last week, urging her to release the pending compensation cess since August. States get an average cess compensation of about Rs 7,500 crore per month (as per the last fiscal’s numbers), which means the Centre is yet to release funds worth over Rs 30,000 crore to these states.

Raju Vernekar

Raju Vernekar is a Media Professional based in Mumbai and is a regular contributor of Imphal Times. He had served as Chief Reporter at Free Press Journal (1996 – 2015 ). His Activities includes writing for different news papers, script writing/production for TV channels, Films Division. Writing poems in Marathi, Hindi, English, Guiding mass media students and helping people to solve their problems. Raju may be contacted at [email protected]

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