Raipur, Apr 14 (PTI) Chhattisgarh Chief Minister Bhupesh Baghel has written to Prime Minister Narendra Modi seeking extension of the compensation mechanism under the Goods and Services Tax (GST) regime for another ten years.
In a letter written to Modi on Thursday, Baghel also said the Union government should come up with some arrangement to make up for the revenue shortfall which manufacturing states are facing.
The Union government had committed to compensate states for any revenue loss on account of the transition to GST, which was rolled out on July 1, 2017, for a period of five years.
“The Union government’s move to stop the compensation given to states under the GST after June 2022 will cause a huge loss of revenue to manufacturing states like Chhattisgarh. The contribution of such states in the economy of the country is comparatively more than that of the states which benefitted under GST system by consuming goods and services,” the letter said.
“If GST compensation is not continued beyond June 2022, then Chhattisgarh is expected to face revenue loss of Rs 5,000 crore approximately (in the next financial year). Similarly, other states would also have reduced revenue receipts in the next financial year. It would become very difficult to arrange for (make up for) shortfall in funds for public welfare and development works,” Baghel added.
After the GST was rolled out, states have less powers to levy taxes, the chief minister noted.
“Although every effort is being made by the state to generate revenue, at least the present compensation grant system should be continued for next 10 years,” he added. PTI TKP KRK KRK
