With coffers empty, Thackeray seeks GST dues from Centre

Mumbai: Staring at the state’s empty coffers, Maharashtra Chief Minister Uddhav Thackeray has demanded that the Centre plough back its total outstandings on account of GST-IGST of over Rs 15,500 crores, an official said here on Wednesday.

In a letter to Finance Minister Nirmala Sitharaman, Thackeray said that this includes Goods & Services Tax compensation of Rs 8,611.76 crore and the rest arrears of Integrated Goods & Services Tax.

This, coupled with the ongoing economic slowdown, has posed serious problems for the state’s finances owing to which its development programmes are suffering, the CM informed Sitharaman.

The state’s communication to the Centre came barely days after Minister Jayant Patil revealed that the state’s current debt burden comprises Rs 4.71 lakh crores, besides another obligation of Rs 2 lakh-crores on various ongoing mega-infrastructure projects like the Bullet Train.

Earlier, Thackeray had demanded that since Maharashtra contributed nearly half the total tax revenues to the central exchequer, the Centre should ‘waive’ off (the state’s contribution) for two years, which could help it wipe off all its debts at one shot.

Detailing, the CM informed Sitharaman that as per the last Union Budget (2019-2020), the tax devolution to Maharashtra is Rs 46,630.66 crore which is 11.15 per cent more than Rs 41,952.65 crore received by the state the previous year (2018-2019).

However, the state has received so far only Rs 20,254.92 crore till October 2019, which is less by Rs 6,946.29 crore, as compared to the Budget estimates for 2019-2020. So, instead of receiving an enhanced amount the state has received less than the budgeted amount, he pointed out.

The ongoing slowdown in the economy has resulted in a shortfall of GST collections compared to the benchmark growth of 14 per cent.

Accordingly, for the first four months in the current fiscal, the state has received only Rs 5,635 crore as compensation and an amount of Rs 8,611.76 crores is outstanding as GST compensation till November 2019.

Thackeray pointed out that the IGST settlement was done in 2017-2018 as per the tax devolution formula of the Finance Commission instead of the formula adopted for the IGST settlement.

“As per the CAG Report No. 11 of 2019, till March 2018, is it noticed IGST settlement for many transactions is not happening. This is partly responsible for accumulation of huge unsettled balance under IGST. This has resulted in a shortfall of IGST settlement due to my state,” Thackeray said.

He said besides the “legitimate dues of Rs 15,558.05 crore from the Centre, the state is also suffering due to a shortfall in tax devolution, and timely release of GST compensation and tax devolution can enable the state manage its finances efficiently.

Thackeray urged Sitharaman to examine the matter and release the pending dues expeditiously so that the state’s developmental programmes do not suffer.

Official sources say Maharashtra is likely to raise these demands at the next GST Council meeting on December 18, especially since the state is the top GST earner nationally, account for around 15 per cent of the total GST revenues.

Besides Maharashtra, five other opposition-ruled states – Delhi, Rajasthan, Punjab, West Bengal and Kerala – have also raised similar concerns about the delayed GST compensation settlement for Aug-Sept period.

IANS