GUWAHATI: The State Government has urged the Centre to continue the GST (Goods and Services Tax) compensation system. Assam gets around Rs 250 crore annually as GST compensation from the Centre.
The Centre put a mechanism to pay GST compensation for five years from July 2017 while introducing it. The five-year period will expire in June this year.
An official source said, "If the GST compensation from the Centre stops, it will affect the state's financial condition. We are getting a regular amount as GST compensation from the Centre annually. The GST Council will meet soon to decide if it has to go ahead with the GST compensation system. We have urged the Centre to continue the GST compensation system. If the Centre stops GST compensation, it should give us a package.
"From 2020, the Centre reduced the GST compensation and gave a facility to the states to take back-to-back loans from the RBI. We have taken around a Rs 6,000-crore loan from the RBI. However, it is not clear who will repay the loan and its interest, and how."
The source further said, "The State Government is losing revenue amounting to Rs 1,000 crore annually for reducing VAT on petrol and diesel. Own revenue-earning sources of the State Government are limited. Around 25 per cent of the Budget estimate for fiscal 2022-23 is from the State Government's resources. And the rest is from the Centre and public debt. The Budget estimate this year is Rs 1.19 lakh crore – Rs 25,000 crore will come as the share of central tax, Rs 30,000 crore from centrally-sponsored schemes, Rs 10,000 crore as grants from the Finance Commission, Rs 20,000 crore as public debt etc. The State Government's revenue can hardly meet the salary and pension expenditure. We want the Centre to continue the GST compensation system or give us a special package."