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Refusal to pay GST compensation to states biggest betrayal in the history of federalism: Deputy CM Manish Sisodia

Refusal to pay GST compensation to states biggest betrayal in the history of federalism: Deputy CM Manish Sisodia

Refusal to pay GST compensation to states biggest betrayal in the history of federalism: Deputy CM Manish Sisodia
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By CNBC-TV18 Aug 27, 2020 9:16:10 PM IST (Updated)

Deputy chief minister of Delhi Manish Sisodia on Thursday called central government's refusal to pay GST compensation to states as the biggest betrayal in the history of federalism in India.

Deputy chief minister of Delhi Manish Sisodia on Thursday called central government's refusal to pay GST compensation to states as the biggest betrayal in the history of federalism in India.

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Sisodia said the central government has failed in its responsibility in giving the GST compensation to states, "When GST was rolled out, states were promised that we would be given compensation for the next 5 years with 14 percent of growth. But today, the central government has refused to pay by saying as per the law, due to the ongoing situation created by COVID-19, we are not liable to pay anything."
He said many states including the BJP led states demanded compensation from the central government, and even quoted the minutes of the seventh, eighth, and tenth meetings of the GST Council where it was clearly stated that the central government takes full responsibility that if the revenue of any state decreases then the central government will compensate it.
Alleging that the central government earned extra cess of Rs 47,000 crore which was supposed to be given as compensation to states, deputy chief minister said, "Today when the revenue has started decreasing, they started asking AG that whether we are liable to give this amount to states or not."
He added, "Today if GST would have not been there, we would have been able to define our taxes. We would have been able to manage our expenses on our own but after joining the GST regime, states had to surrender the maximum of their rights to GST council."
Sisodia said, "It was decided that if required, the central government will take a loan which will be repaid through the cess. But today, the central government refused to take a loan for any state. They gave an option to states that if you need compensation, you can take a loan from RBI. We will ask RBI to provide you loans."
He further added, "Due to the unique status of Delhi, our government cannot take a loan. They are showing double-standards with the people of Delhi."
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