Chief Minister shoots reminder letter to release Rs 12,000 cr GST dues

“As on date, a total sum of Rs 12,250.5 crore is due to Tamil Nadu as compensation for shortfall in GST collections, of which Rs 11,459.37 crores has accrued from April to July, 2020. As you (Prime Minister) are aware, the states have suffered a severe loss in revenue in the wake of the COVID-19 pandemic and have also been at the forefront of the battle to prevent the spread of the disease,” said the Chief Minister, in the letter.

Tamil Nadu had been stressing the Union government to release GST compensation amount since its implementation. Even recently, state Fisheries Minister D Jayakumar, who represented the state government in the 42nd GST council meeting, urged the Centre to disburse more than Rs 14,000 crore, including the iGST compensation. As there was no response from the Central government, the Chief Minister in his letter said that so far, no compensation has been released for the shortfalls in revenue collection since April 1, this year. “Considerable additional expenditure of nearly Rs 7,000 crore has already been incurred towards upgrading health facilities, providing medical supplies and towards relief measures for the most affected. For the economy to restart effectively, the state governments also need to ensure that regular budgetary expenditure on on-going schemes and programmes picks up,” noted the Chief Minister.

Chief Minister Palaniswami also said that he had already requested the Prime Minister that one-third additional borrowing may be permitted to states over the 2019-20 level and an untied special grant of Rs 1 lakh crore be released to all states as budgetary support, in addition to other specific grants.

“As part of Atma Nirbhar Bharat programme the states were permitted an additional borrowing of 2 per cent of GSDP of which 1.5 per cent was permissible based on implementation of certain reform measures identified by the Government of India. This additional borrowing has been fully factored into our fiscal projections for 2020-21 and is essentially required, in addition to the full compensation for GST shortfall,” said the Chief Minister.