Centre has to pay states full GST dues: Attorney General

Centre has to pay states full GST dues: Attorney General
NEW DELHI, AUG 26 (AGENCIES) | Publish Date: 8/26/2020 12:58:56 PM IST

Ahead of the crucial meet of GST council, Attorney General KK Venugopal has said the centre has to fully compensate the states which have lost revenue in GST due to COVID pandemic.

"The Centre is bound to pay the states full compensation irrespective of any shortfall, Venugopal said in response to questions by finance ministry amid strident demands from states for compensation under GST, reports NDTV.

On questions regrading extension of compensation period, government's top lawyer said there can be no extension unless states agree to this deferment. Not only opposition, even the states ruled by the BJP are seeking full compensation from the centre.

Bihar Deputy chief minister Sushil Kumar Modi has said the Centre should borrow and pay GST compensation to states as it is morally bound to do so. “State finances are under stress. We are able to pay only salaries, wages and pensions. We are heavily dependent on the Centre as 76 per cent of our revenue comes from the Centre…,” The Indian Express quoted the BJP leader as saying.

At a press meet on Tuesday, Punjab Finance Minister Manpreet Badal said not paying compensation to states is akin to a sovereign default and is in disregard of the Constitution.

The GST Council is set to meet on Thursday to discuss the issue of grant of compensation to states for the loss of revenue due to the COVID-19 pandemic. Finance ministers of all states are part of the GST Council, where the opposition chief ministers are expected to jointly demand from the government grant of 14 per cent GST compensation to them.


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