As Centre aims to conclude the on-going debate on borrowings for the shortfall in compensation cess kitty to pay off the states dues on October 12, Opposition parties are likely to ask tough questions.
Opposition parties ruled states are likely to demand a vote on the proposal, several leaders told CNBCTV18.
TS Singh Deo, health minister and GST Council representative, of Chattisgarh, in an interview to CNBCTV18 said, “Centre is trying to push unconstitutional borrowing to deal with compensation shortfall. GST Council has previously discussed that in case of shortfall bonds and other means like loans will be made available. We will seek a vote on the proposed borrowing options in the upcoming meeting on 12th Oct.”
The GST Council will meet on October at 11am via Video Conference, once again to iron out the issues on deciding the future roadmap to deal with the shortfall of funds in the compensation kitty.
Sources said that the “Council will consider the 12th October meet as continuation meeting of 42nd Council meet. This time, the GST Council will only discuss pending Agenda Item – “GST Compensation options – Ways of meeting the shortfall”. “No separate Agenda item will be circulated.”
As conclusion eludes the GST Council to form a consensus on the option of borrowing to make good for the shortfall in the compensation cess kitty, borrowing by states does not require the approval of the GST Council, and so the issue does not need to be put to vote, sources had told CNBCTV18.
Sources had said that when it comes to exercising the option of voting on the contentious issue of whether Centre or states should borrow and if states borrow then which should be a preferred option to make good for shortfall of funds under the compensation cess kitty, then in this case the GST council can’t go for voting.
“The issue of borrowing is not a GST council matter or is not something which is under the jurisdiction of GST council. GST Council has jurisdiction to extend the levy of cess to compensate for the shortfall in the compensation. It has done that. Now the ball rests in the court of states, not the GST council,” sources had said.
Reacting to this, Singh Deo said that “If voting on borrowing is not under Council’s purview then why did Centre bring borrowing on the Agenda. Borrowing should not have been suggested in 41st Council & circulated in the agenda of 42nd council meet. If borrowing is not under the purview of the Council then entire option of borrowings should be ruled out. Council should relook at options available under GST jurisdiction and sit afresh with proposals.”
Whether the 10 opposition states agree to the borrowing options or the Council looks at fresh ways and means to raise revenues to deal with the declining funds in the compensation cess kitty is to watch out for.