Uttarakhand wants Rs 2,041 cr compensation for GST losses
Dehradun: Uttarakhand agriculture minister Subodh Uniyal on Wednesday raised the demand of Rs 2,041 crore compensation from the central government to recover the losses suffered in the Goods and Service Tax (GST) collection during the COVID-19 lockdown.
Speaking with the Millennium Post, Uniyal said, "In my online meeting with the finance ministry officials over the compensation package, I had sought Rs 2,041 crores to recover our state's GST losses. Uttarakhand's demand is justified because we had also lost out in the overall tax growth criteria adopted to decide the compensation at implementing the GST.
In 2017, the GST was rolled out across the country and 14 per cent annual tax growth was decided by the central government. Uttarakhand had 17 per cent tax growth rate which meant we lost 3 per cent of tax growth rate value.
The minister added that in case of the tax collection getting lower
than the threshold of 14 per cent, Uttarakhand was supposed to get compensation till 2022.
"As things stand today our state will not opt for the external loan
from the banks because we are already in heavy debt. So I am expecting that the central government would release the compensation package for Uttarakhand," said Uniyal.
It is worth noticing that the state's financial health is not in great shape. According to the state finance department, the long interest payment liability has grown to Rs 5,880 crore which is 2.1 per cent of the state GDP, and state's total loan liability is over Rs 71,500 crore which is 36 per cent of the state GDP.
Uniyal said, "Uttarakhand's long term interest payment liability
factor that is over Rs 5,880 crore does not leave much scope for
external borrowing from the banks to recover the GST losses." The
minister further added that the financial impacts of the COVID-19 outbreak have started showing up in both rural and urban economies across the country.
"The GST is a consumption-based tax, so making the collection
recovery of say months like April, May, June, July and August, are not feasible in the next three months," said Uniyal.
