Nothing can be more damaging, unfair and unjust than this, if it happens: Mitra

Kolkata: Amit Mitra, the state Finance minister wrote to Union Finance Minister Nirmala Sitharaman stating that Constitutional guarantee given to the states will be infringed if GST compensation is not paid at the rate of 14 per cent and "nothing can be more damaging, unfair and unjust than this if it happens".

This comes when the Centre is yet to clear GST compensation worth Rs 4131 crore to Bengal apart from Rs 53000 crore that the Centre owes to the state under various heads including Centrally Sponsored Schemes (CSS), devolution funds, etc.

Chief Minister Mamata Banerjee has also raised her voice against the Centre's indifference in clearing the GST compensation. This comes when it was reported that the Union Finance secretary Ajay Bhushan Pandey told members of the Parliamentary Standing Committee on Finance that Centre may not be able to pay all GST compensation due to the setback in economic activities for the nationwide lockdown. "It appears that our worst fears are now coming true. It is surprising that the constitutional guarantee given to the states in being interpreted in a manner that the Centre is not responsible to compensate the state and it is the state (in the GST Council) which will have to find means to compensate themselves!," Mitra stated in his letter adding that "nothing can be more dangerous, unfair and unjust than this". He further stated that "those are forwarding such views (of not clearing GST compensation) are either not aware of the spirit and intent of the Constitutional Amendment or are consciously turning a blind eye to renege the sovereign promise to the states."

Referring to the Section 18 of the 101 Constitutional Amendment Act, Mitra mentioned in his letter that any other interpretation of the same is not justifiable as the word "may" in the section was changed to "shall" to assure the states that the Centre is constitutionally committed to compensate the states for a period of five years for any loss of revenue arising from GST.

"Therefore, there can be no going back on the fact that compensation has to be paid and the rate of 14 percent is also sacrosanct as it was unanimously decided by the GST Council," he stated in his letter adding that the Centre

must pay the compensation from the different Cesses that it collects.