Says, Benefit of GST Rate Rationalization Should Reach Poor People, rather than Corporate Houses
Punjab FM participated in meeting on consultation of GST Rate Rationalisation in the national capital
Chandigarh/New Delhi, August 29
Punjab Finance Minister Advocate Harpal Singh Cheema stated that the central government, under the current proposal to rationalize Goods and Services Tax (GST) rates, should provide adequate compensation to states to prevent financial instability. He emphasized that the benefits of this measure should reach the poor people of the country who are facing inflation, rather than corporate houses.
He stressed that if the current proposal for price rationalization is implemented without a provision for compensation to cover revenue loss, it will lead to financial instability in the states and harm the country’s federal structure, which is unacceptable.
Punjab cabinet minister Mr. Cheema who attended an important meeting on-‘consultation of GST rate rationalisation’ along with finance ministers and representatives of states including Karnataka, Himachal Pradesh, Jharkhand, West Bengal, Kerala and Telangana organised at Karnataka Bhawan here said that it is the considered recommendation of the States that rate rationalisation should be supported by a robust revenue protection framework. Only such a balanced approach will protect the fiscal autonomy of States while advancing the objectives of GST reform in the true spirit of cooperative federalism.
Punjab finance minister said that the GST was rolled out in July 2017 and the principal of revenue neutrality was central to this design but after its implementation, states have to face significant revenue losses. Mr. Cheema said that after the implementation of this, Punjab has to bear financial loss of around 1.11Lakh Crore though the state received 60000cr when the compensation cess was active, but till date no step has been taken on part of the centre government to compensate the remaining loss amounting to 50000 crore to Punjab.
Interacting with the media, he said that all these states have strongly voiced for a mechanism of additional levy on sin and luxury goods to be imposed in order to maintain the current effective level of taxation. These proceeds must be fully transferred to the States to compensate them for experiencing rising fiscal stress alongside an erosion of fiscal autonomy.
“Without revenue stabilisation, how can the states perform their constitutional duty of social welfare. The centre should not incline towards the theory of shifting the burden on the shoulders of the states and retain the revenues with itself. If the states are financially strong only then they can play a pivotal role in further strengthening the country so the revenue interests of all the states must be protected and robust mechanism should be made in achieving this goal” said Mr. Cheema adding further that these states are representing all the other states on this issue.
Giving reply to a question on the situation of floods Punjab Finance minister said that the union government should come forward to help Punjab in this calamity, He said that the Punjab government is working sincerely to help the people of state in the current tough times and will demand a special package from the centre after duly assessing the damage.
