FM Sitharaman says govt will pay states' share of GST; 'compact will be honoured'
Centre is yet to pay states' GST share due for the past four months; Kerala had last week threatened to drag the Centre to the Supreme Court over delay in compensation to states

- Dec 7, 2019,
- Updated Dec 7, 2019 11:57 AM IST
Union Finance Minister Nirmala Sitharaman on Saturday said the Centre government would keep its "compact" with states when it comes to sharing of cess collected through Goods and Services Tax (GST). She said there was a delay in transfer of cess to states as it was not "adequate". "In the last GST collection, the cess fund wasn't adequate ...so the states didn't get the 14 per cent compensation. When we collect the required cess, we will honour the compensation rate," the FM said at the Hindustan Times Leadership Summit in New Delhi on Saturday. The FM also added: "It's not that the compact has been broken. The compact will be honoured".
Kerala had last week threatened to drag the Centre to the Supreme Court over delay in compensation to states. Notably, the Centre is yet to pay states' GST share due for the past four months. The finance ministers of Kerala, Delhi, Rajasthan, Punjab, Chhattisgarh and Madhya Pradesh had even met the FM in this regard this week.
The Goods and Services Tax (GST) panel, which is concerned over the declining revenue, is planning to introduce several key measures to increase collection, including increasing the 5 per cent tax slab to 6 per cent and raising tax on cigarettes and aerated drinks. The high-powered GST panel is scheduled to hold crucial consultations with states and GST officials on December 18. However, there is no official confirmation in this regard.
Union Finance Minister Nirmala Sitharaman on Saturday said the Centre government would keep its "compact" with states when it comes to sharing of cess collected through Goods and Services Tax (GST). She said there was a delay in transfer of cess to states as it was not "adequate". "In the last GST collection, the cess fund wasn't adequate ...so the states didn't get the 14 per cent compensation. When we collect the required cess, we will honour the compensation rate," the FM said at the Hindustan Times Leadership Summit in New Delhi on Saturday. The FM also added: "It's not that the compact has been broken. The compact will be honoured".
Kerala had last week threatened to drag the Centre to the Supreme Court over delay in compensation to states. Notably, the Centre is yet to pay states' GST share due for the past four months. The finance ministers of Kerala, Delhi, Rajasthan, Punjab, Chhattisgarh and Madhya Pradesh had even met the FM in this regard this week.
The Goods and Services Tax (GST) panel, which is concerned over the declining revenue, is planning to introduce several key measures to increase collection, including increasing the 5 per cent tax slab to 6 per cent and raising tax on cigarettes and aerated drinks. The high-powered GST panel is scheduled to hold crucial consultations with states and GST officials on December 18. However, there is no official confirmation in this regard.