Kerala, reeling under economic crisis due to the second wave of the pandemic, looks forward to the next Goods and Service Tax (GST) Council for getting the GST compensation shortfall of ₹4,077 crore.
The State would have to wait as another council meeting would be convened to discuss the compensation issue, Finance Minister K.N. Balagopal said after attending the 43rd GST Council meeting held online on Friday.
Mr. Balagopal sought immediate disbursement of the GST compensation arrears and extension of the compensation shortfall payment for five years from 2022 in view of the economic crisis arising due to pandemic-induced lockdown. The State sought exemption of GST on COVID-19 vaccines and essential supplies, instead of back to back loans. Mr. Balagopal said the subcommittee of Ministers would take a call on this demand within eight days.
Pointing out that Centre was trying to weaken the States financially, Mr. Balagopal, who is attending the GST council for the first time after taking over the Finance portfolio, said Kerala opposed the move to include saturated alcohol among other things in GST.
The Finance Minister said the State is of the view that petroleum products should not be included in the GST. With the second wave of COVID-19, the State has been pushed into another fiscal crisis. Mr. Balagopal, who has to present his maiden and revised budget for 2021-2022 in the Assembly on June 4, said discussions were underway on tapping revenue sources.
Kerala had anticipated ₹ 9,006 crore as GST compensation till January 2021 as per the Centre’s decision to borrow through a special window and provide back to back loans to the states. But, Kerala received only ₹ 5,700 crore last fiscal as GST compensation from the ₹ 1.10 lakh disbursed by Centre as GST compensation to all states.
The shortfall in GST compensation payable to states in the current fiscal is around ₹ 2.69 lakh crore, of which ₹ 1.58 lakh crore would have to be borrowed this year.
