The GST Compensation Act of 2017 came into existence in order to provide compensation to the States for loss of revenue arising on account of implementation of the goods and service tax in pursuance of the provisions of the Constitution.
The BJP government promised to pay 14% GST compensation to states and in 2019-20, the central government had released Rs1,65,302 crore as GST compensation but recently the finance secretary-Ajay Bhushan Pandey in a parliamentary panel said that the government has no money to pay the GST compensation to states.
Ajay Pandey says, “The promise of protecting states’ revenue at an annual 14% growth rate was based on certain assumptions which could not be met. And if GST revenues drop, the law allows for a relook at the promised compensation, according to the panel member.”
The opposition stood against the panel as they said that government is not sticking to their promises and can’t pay GST compensation to states. Congress MPs Manish Tewari, Ambika Soni, Gaurav Gogoi, and NCP MP Praful Patel formed a committee and parliamentary panel was called wherein questions raised against the government as it is not in a condition to pay promised GST compensation.
On account of this Finance Minister of Punjab-Manpreet Singh Badal from Congress also tweeted against the government on its statements.
Here’s the link to his tweets: