Page 44 - GSTL_6th August 2020_Vol 39_Part 1

J26 GST LAW TIMES [ Vol. 39
Some reports have suggested that the Government is considering taking
out a loan against the future stream of revenues from Compensation Cess. This
may not be a viable plan. The alternative is to increase the Compensation Cess on
certain products - but, in the middle of a downturn, this is hardly going to be
politically palatable. Also, an increase in cess may not be sufficient to compensate
the States. Other ways out may need to be found. For example, the criteria given
for States to raise their own borrowing cap in this year may now be considered
too stringent and could be relaxed. What is certain is that the Union Government
can neither let this issue slide much longer, nor can it come to some conclusion
on what must be done on its own. States need some clarity on their dues, so they
can form spending plans.
The State Governments are on the frontline in terms of responding to the
public health needs of the pandemic, providing relief to those affected, and nur-
turing a recovery. They cannot be starved of finances at this crucial time. The
Union Government cannot shirk its responsibility to live up to its commitments.
In any case, no renegotiation of its commitments, even at this moment of crisis,
can happen unilaterally; the GST Council would have to meet and agree. But the
scheduled July meeting of the Council has not taken place. This must be a priori-
ty for the Government. Even if it has, as yet, no plans on how to raise the funds
that States are due, it must take the State Governments into confidence. This is a
shared crisis, and a solution must be found co-operatively.
[Source : Business Standard, New Delhi, dated 31-7-2020]

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GST LAW TIMES  6th August 2020  44
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