Telangana Chief Minister K Chandrashekar Rao on Saturday wrote to Finance Minister Nirmala Sitharaman, urging her to release Rs. 4,531 crore in GST dues pending from the Centre. In the letter, the CM explained the State's financial position and the tax devolution received by the State so far. "Tax devolution in Telangana is Rs. 19,719 crore, 6.2% more than last year. However, this State has received only Rs. 10,304 crore till November, which is less by Rs. 224 crore compared to last year. So, instead of receiving an enhanced amount, the State has received less," Rao said.
"With the further slowdown of the economy during the second quarter, it is likely that there will be a further reduction in tax devolution. Further, because of the slowdown in the economy, there is a shortfall in GST collections compared to the benchmark growth of 14%, and an amount of Rs. 1,719 cr is due as compensation as mandated under the GST Act," Rao added. He outlined that the State received compensation only for the first four months in the current financial year and the balance amount is due.
"The IGST settlement was done during 2017-18 based on the tax devolution formula of Finance Commission, instead of the formula adopted for IGST settlement. This has resulted in a shortfall of Rs. 2,812 crore. Due to the above reasons, the State is waiting for its legitimate dues of Rs. 4,531 crore of GST, while at the same time it is also suffering due to a shortfall in tax devolution," the CM said. "I request you to kindly look into the matter and release the pending dues expeditiously so that the developmental programmes of Telangana do not suffer for lack of resources," he further said.
Maharashtra may be among the non-BJP-ruled States which raised alarm about the delay in payment of GST compensation recently, NCP leader Dhananjay Munde claimed on Thursday and called for flagging the issue at the Centre's level. His comments come in the run-up to the meeting of Goods and Services Tax (GST) Council on December 18.
Last month, five non-BJP ruled states, West Bengal, Rajasthan, Punjab, Delhi and Kerala, had raised concerns over delay in payment of GST compensation by the Centre since August, resulting in pressure on their finances, as GST comprises a significant chunk of revenues for State governments. "Today, Kerala, West Bengal, Delhi, Rajasthan and Punjab are faced with this problem. Maharashtra is set to face such a situation tomorrow. "There is a need for all states to come together to question the Centre and raise the issue at the #GST Council," Munde, an MLA, tweeted.
(With agency inputs)