GST: Survival is not a solution The Central GST loss must be paid – vijaya karnataka editorial nirmala sitharaman announces government

Finance Minister Nirmala Sitharaman has said that Rs 20,000 crore collected through Cess this year will be distributed on Monday night in connection with GST compensation to the states. He said Rs 24,000 crore related to IGST will be distributed to the states next week. This was the announcement made after the GST board meeting. The states have demanded that the central government should be fully devolved to the state governments to compensate for the huge losses resulting from the GST implementation and the Kovid crisis.

Instead of compensating itself for losses, the states had an alternative route of borrowing. However, 10 states have held that we have to borrow to cover our own compensation. Therefore, no decision has been taken at the board meeting held on Monday. The decision has been postponed to A12. Meanwhile, the Ministry of Finance has decided to issue the cess amount.

This cess is not indemnity. This is a tax surcharge. It is usually levied on luxury items such as cars and tobacco. It ranges from 12 per cent to 200 per cent on various items. When the GG ST was imposed in 2017, this subreddit was also laid. The cess was announced in 2022. As expected, cess 2022 should be included if the GST system is profitable. However, the Finance Minister said on Monday that the cess now available in the form of relief for the states will be extended by 2022. This means that the public will be taxed longer.

Happily, the Center has agreed to provide some kind of compensation for the states. But it must also be understood that the end result will fall on the citizens of the state again. Cess is highest in South Indian states which offer the highest GST. This burden will fall on the states of South India including Karnataka. Southern states are known to be unfair even in the allocation of the new Finance Commission.

When it comes to GST compensation, the Center is experimenting with many liability strategies. It is not an escape tactic called ‘act of God’. Because the tax system is centralized by itself. Now the states have created a situation where the center is facing all the costs. It is fair that the center, which created such a situation, has to handle the burden of filling up when there is a shortage of money. Otherwise, without proper grants for projects, there will be no infrastructure, no enterprises, no revenue without enterprises, and it will be left to the tax collection.