Jharkhand CM Hemant Soren seeks PM Modi’s intervention to resolve GST compensation issue

Jharkhand Chief Minister Hemant Soren in a letter to Prime Minister Narendra Modi on Friday, September 4, sought his intervention in the release of Goods and Services Tax (GST) compensation due to the states. His letter comes after the Government of India expressed its inability to give the state's compensation for the loss of GST revenue suffered by Jharkhand in the financial year 2020-21.

"Today, I've written to the PM to convey our deep concerns with regard to hurdles in the payment of GST compensation by Central Government to the States and have requested the PM to intervene and advise Finance Ministry to uphold the spirit of Cooperative Federalism in practice," Jharkhand CM.

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"I am writing this after being informed that the Government of India has expressed its inability to give us compensation for the loss of GST revenue suffered by Jharkhand in the financial year 2020-21", the chief minister said.

According to CM Soren, Jharkhand being a manufacturing and heavy industries based state, receives less compensation and is thus, bound to suffer losses in the GST regime. Adding further he said even then Jharkhand State Assembly consented to its implementation.

"Not only this, but Jharkhand also contributes to compensation fund a cess of nearly Rs 5,000 crore from the mineral sector alone. What we get in return is just a paltry sum of nearly Rs 150 crore as monthly compensation. And now we are being asked to borrow at a time when the state is hard-pressed to fulfil salaries of Government servants," Soren wrote in the letter.

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'Jharkhand has registered a loss of nearly Rs 2,500 cr'

Jharkhand has so far registered a loss of nearly Rs 2,500 crore in the current fiscal however no compensation has been released by GOI, the chief minister said in his letter. Soren further said in the recent GST Council meeting Union Finance Minister, instead of giving some firm commitment, unbelievably decided to thrust unilateral and arbitrary options which require states to borrow crores of rupees.

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The chief minister said that the poor people of this backward State would like to know what wrong they committed to earn this additional burden of borrowings. The obvious question that is being asked by all is why GOI could not borrow and compensate States to fulfil is constitutional commitments, he added. "May I, therefore, request your kind intervention in this matter and urge you to direct the concerned ministry to release our compensation dues at the earliest. This will not only melt away all our apprehensions but also reinforce our trust in the spirit of cooperative federalism," the chief minister said.

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(With ANI inputs)