States Demand GST Extension For 5 Years During Pre-Budget Meeting With FM

States demand GST extension for 5 years during pre-budget meeting with FM

States have demanded extension of GST compensation scheme for another five years


New Delhi:

Several states have demanded extension of the GST Compensation Cess regime for another five years and also urged that the central government’s share in central government-sponsored schemes should be increased, as their revenues have been badly hit by the coronavirus pandemic. has gone.

The issue came up for discussion during Finance Minister Nirmala Sitharaman’s pre-budget consultations with her state counterparts.


The GST compensation to states for revenue shortfall resulting from subsuming local taxes such as VAT in a uniform national tax Goods and Services Tax (GST) will expire in June next year.

States have suffered loss of revenue due to GST tax system, the Center has not made arrangements to compensate the loss of revenue of about Rs 5,000 crore to the state in the coming year, so the GST compensation grant should be continued after June 2022 For the next five years, Chhattisgarh Chief Minister Bhupesh Baghel said.

Delhi Deputy Chief Minister Manish Sisodia after meeting Sitharaman said, “Many states have asked for it. We have also asked for increasing the GST compensation. If it is not increased, the financial condition of many states will deteriorate.”

Pointing out that Chhattisgarh has got Rs 13,089 crore less in central taxes in the Union Budget for the last three years, Mr. Baghel demanded that the share of central taxes in the coming year should be passed on to the state completely.

He also demanded that Rs 4140 crore deposited with the Center on coal mining from coal block companies at the rate of Rs 294 per tonne should be transferred to Chhattisgarh soon.

Rajasthan Education Minister Subhash Garg said that the extension of the Compensation Cess window till 2026-27 is a legitimate demand of the states and the Center should consider it.

He also demanded reduction of import duty on gold and silver from 10 per cent to 4 per cent.

“Our most important demand is that the share of the Center in the Centrally Sponsored Scheme is gradually reduced and that of the States has increased. Earlier the share was 90-10 and now it is 50-50 or 60-40, we request That it should go back to 90-10,” Mr Garg said.

West Bengal also advocated extension of GST compensation for another five years, citing a tough two-year period due to the coronavirus pandemic.

West Bengal Urban Development and Municipal Affairs Minister Chandrima Bhattacharya said the coronavirus crisis was not anticipated when it was decided. He also said that the states have also asked to increase the share of the central government in centrally sponsored schemes.

With regard to state borrowing, it said that the additional lending window should be without any restriction.

Tamil Nadu Finance Minister P Thyaga Rajan said he has sought extension of the GST Compensation Cess regime by at least two years due to the pandemic.

He also made a case for increasing the Centre’s share in centrally sponsored schemes.


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