Chidambaram lauds 6 states for rejecting Centre’s GST proposal

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September 1, 2020 9:33 PM

As many as seven non-BJP ruled states and Union Territory Puducherry on Monday rejected the Centre's suggestion that the states borrow to make up for the GST shortfall, saying the constitutional liability to fill the gap lies with the Union government.

He said the states should not allow the Centre to evade its legal and moral responsibility to compensate them for the revenue shortfall. (File image)

Congress leader P Chidambaram on Tuesday lauded the finance ministers of six states for rejecting the Central government’s proposals for bridging the GST compensation gap.

He said the states should not allow the Centre to evade its legal and moral responsibility to compensate them for the revenue shortfall.

“Congratulations to the finance ministers of Punjab, Chhattisgarh, Kerala, West Bengal, Telangana and Delhi for rejecting the bogus twin options given by the central government to bridge the GST Compensation gap,” he said on Twitter.

The former Union finance minister said as far as he knows, Rajasthan and Puducherry have also rejected the two options.

“Happy that Tamil Nadu has also rejected the two options,” he said.

“The States must not allow the Centre to evade its legal and moral responsibility to compensate the States for the revenue shortfall. The financial burden of additional borrowing must be borne by the Centre,” he said.

As many as seven non-BJP ruled states and Union Territory Puducherry on Monday rejected the Centre’s suggestion that the states borrow to make up for the GST shortfall, saying the constitutional liability to fill the gap lies with the Union government.

At an informal meeting on Monday, six non-BJP ruled states — Punjab, West Bengal, Kerala, Delhi, Chhattisgarh and Telangana — felt that an alternative mechanism should be worked out to compensate the GST revenue shortfall.

Besides, Congress-ruled Rajasthan and Puducherry too said they will follow suit on the issue of compensation.

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