Karnataka: Compensate for GST revenue loss, demands Basavaraj Bommai

Bengaluru: The Karnataka government on Thursday urged the central government to compensate for the GST revenue loss due to Covid-19 induced lockdown and floods in the state. Home Minister Basavaraj Bommai who represented Karnataka in the 41st GST Council Meeting said the state's tax revenue was estimated at Rs 1.8 lakh crore. "However due to the coronavirus and floods, achieving economic growth will be difficult," a statement issued by his office quoted Bommai as saying during the virtual GST council meeting.

The Home Minister pointed out that despite the challenging situation, the state has managed to collect 71.61 per cent of the said target, which is higher than other states. Yet, the GST compensation amount for four months works out to around Rs 13,764 crore. Reimbursement to the state by the Centre is crucial for the state's economy, Bommai said in the meeting. Underlining that there is a constitutional provision under the GST regulations to pay the state for the shortage in revenue, Bommai insisted that the dues be paid immediately.

According to Bommai, the cess collected to compensate for the revenue losses to the state goes directly to the Centre. This makes states borrowing difficult, he added. The Centre, said Bommai, has the power to impose special taxes enabling states to raise money. Centre also has power to extend the imposition of special taxes beyond 2023. "Hence, it is appropriate for the Centre to facilitate states to help borrow money and compensate for the losses to the state," the Home Minister said. On behalf of Karnataka, he extended all support to the Centre to overcome the prevailing financial crisis in the country. PTI