Karnataka CM Demands Extension of GST Compensation to States for 3 More Yrs
Amid fall in state revenue and GST collection in view of COVID-19 crisis, Karnataka CM Basavaraj S Bommai on Thursday demanded the Centre to extend the GST compensation period to states beyond 2022, for three more years. After a meeting with Union Finance Minister Nirmala Sitharaman, Bommai said he also discussed the GST dues to the tune of Rs 11,000 crore to be paid to Karnataka in instalments.
“The dues that were to be paid from July 2022 are being advanced through installment from this year. Along with this, I discussed extending the GST compensation to states beyond 2022," he told reporters after the meeting. In the meeting, the CM informed Sitharaman that the state GST collection has not yet stabilized in view of the COVID-19 crisis, and it would be more helpful in this ongoing revenue crisis if the GST compensation to states is extended for three more years.
“However, the compensation loan would support the states for only the current financial year, but the impact made by the COVID on revenue collection will be carried forward for next few years also. So, it will take time for GST revenue collection to reach the protected amount," he said. “I request you to kindly reconsider the state’s request on extending the GST compensation," the CM stressed.
The CM also informed that the state government had submitted an additional memorandum to the Commission in this regard. But the Commission has not considered the state’s request. “This has severely impacted Karnataka compared to other southern states," he noted.
Bengaluru, the IT and start-up hub of the country, has a major contribution to the services sector of the national economy. And the city has further potential to attract more investments if the critical infrastructure is improved, he said. That apart, the NABARD assistance given to different groups including SC and ST women, Self Help Groups and for infrastructure purposes– was also discussed in detail with the FM, he added.
