Telangana Chief Minister A Revanth Reddy has demanded that the Centre should compensate the state for a revenue loss of Rs 7,000 crore in the wake of the new Goods and Services Tax (GST) rate.
The rationalisation of GST rates announced by the GST Council came into effect on Monday. The Centre has termed this relief as a Diwali gift to consumers, but the states are worried about the loss of revenue.
Announcing a bonus for Singareni Collieries’ employees at a programme on the eve of the festive season, Telangana chief minister said that the GST rate rationalisation would cost the state exchequer no less than Rs 7,000 crore. “We are demanding that the Centre address the concerns raised by Telangana on revenue loss after the introduction of GST rate rationalisation,” he added.
When the GST was introduced, he recalled that the Centre had promised to compensate for any revenue losses if the tax growth rate fell below 14 per cent. Pointing out that the state has already drawn up budgetary plans based on the expected revenue, he said it was the Central government’s responsibility to compensate for the loss in revenue at least for the next 5 years.
Pointing out that Deputy Chief Minister and Finance Minister Bhatti Vikramarka had submitted a memorandum outlining the losses following the meeting of the GST Council, the chief minister urged Union Minister G Kishan Reddy to bring this to the attention of the Centre, adding that the finance minister will write a detailed letter on revenue loss.
Meanwhile, Andhra Pradesh Chief Minister N Chandrababu Naidu, while admitting that the state government would face revenue losses, welcomed the move, pointing out that it will bring a huge relief to the public and boost consumption and eventually the economy.
Today, he announced that AP would celebrate a month-long awareness campaign, “Super GST – Super Savings”, to inform the people about the benefits of GST reforms and how it translates into direct savings for them.
The NDA government at the Centre has rolled out the GST Bachat Utsav to mark the commencement of the reforms in the GST tax structure.