Bengal may be deprived of GST compensation, feels Mitra
Kolkata: State Finance and Industry minister Amit Mitra on Tuesday expressed his concern that Bengal might be deprived of its share of GST compensation for the months of February and March, with the projected cess collection of the Centre dropping drastically.
Mitra reiterated that the states will be denied of their constitutional right if the GST compensation is not paid.
"The cess collection for the Centre was targeted at 21 percent but it has dropped to 1.5 percent. We still have a huge payment due when it comes to payment of GST compensation and I am concerned that we might not get our due compensation for the month of February and March. It is the constitutional right of the state to get compensation of the GST, but with the cess collection which is the source of GST compensation dipping, GST compensation to the states will be affected," Mitra said, addressing a CII Conference on West Bengal – Poised to Lead: Business & Beyond.
Mitra pointed out that GST fraud as per declaration of the Union government at the state Parliament has been to the tune of Rs 44,000 crore, while Rs 46,000 crore is yet to be recovered from penal interest charges arising out of delayed GSTR III-B filing.
"There has been a 14 times increase in suspicious transactions, which has gone over 14 lakh," he said. Mitra maintained that with the Centre's low tax collection, Bengal will be losing Rs 11,000 crore which will be a heavy blow to the state's finances.
"The Centre's steady increase in cess and surcharges are squeezing the state as they do not get any of the shares in this regard. From 2013-14 till now, the Centre has raised cess from 6 percent to 18 percent," he said. The Finance minister also pointed out that the country is going through a major economic crisis, with the Global Democracy Index compiled by The Economist magazine stating that India's ranking has dropped by 10 places to 51st in the world.
"As per the Global Social Mobility Index prepared by WEF, India's position is 76th among 82 countries. The Global Hunger Index released in 2019 also portrays the country in an economic crisis. These are very disturbing signals as these are important for sustaining investor confidence," he added.
The minister also presented a contrasting picture of Bengal, which is presently growing at the rate of 10.4 percent, with an Index of Industrial Production (IIP) at 3.1 percent compared to the Indian IIP of negative 0.3 percent.
He added that compared to 2011, the state's CAPEX has gone up 11 times and planned expenditure, agri and allied sector expenditure, social sector expenditure as well as infrastructure spends have all increased manifold.