States have lost 60-70 per cent of their tax revenues after joining the GST regime while the Centre’s loss was pegged at 31 per cent only, Telangana Finance Minister Harish Rao who participated in the GST Council meeting said on Thursday.
According to an official release, Telangana demanded that the Group of Ministers headed by the Bihar Deputy Chief Minister Sushil Kumar Modi on the Integrated GST to finalise the modalities and release Telangana’s due share of Rs 2700 crore towards IGST.
“All the states have joined the GST as the Centre had assured them that joining the GST will not cause any loss to the revenue of the states. The responsibility for paying GST compensation lies entirely with the Central government.
The States lost 60 to 70 per cent of their revenue after joining the GST regime while the Centre lost only 31 per cent. Therefore, the Centre will have to pay GST compensation to the states,” the release quoted Harish Rao as saying.
Telangana is one of the five states that pay the highest GST while it is one of the least compensated states.
The state has paid nearly 19,000 crore to the Centre in the form of GST cess, while it was given back just Rs 3,223 crore, it said.
The policies pursued by the Centre are benefitting states prone to natural disasters and poor fiscal management. They became disadvantageous to progressive states such as Telangana, the minister said.
Along with Harish Rao, chief secretary Somesh Kumar and other senior officials participated in the meeting.
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