Centre setting wrong precedent: Manpreet Badal at GST council meet

Punjab mounts sharpest attack over non-payment of GST compensation

Tribune Web Desk

Updated At : 01:05 AM Oct 13, 2020 IST

Ruchika M. Khanna

Tribune News Service

Chandigarh, October 12

In the sharpest attack on the Centre over the non-payment of compensation of Goods and Services Tax, Punjab has accused the Union government of setting a wrong precedent by ignoring the tenets of the Constitution of India and the Compensation Law in the GST.

Punjab Finance Minister Manpreet Singh Badal reportedly minced no words in the meeting of the GST Council in Delhi today, as he made the state’s stand clear that it wanted the compensation of Rs 9,000 crore that the Centre owed to the state, as per the originally drawn out plan.

Talking to The Tribune, Badal said he had made the state’s stand clear: if a pragmatic change is necessary, amend the law. “The Centre cannot split the compensation into two parts, as is being proposed in the GST Council meetings. There is no legal basis to apply 7 per cent growth (from the earlier proposed 10 per cent growth in compensation). It has to come from the Compensation Fund, as defined in Section 10. It cannot come through borrowings as is now being suggested. Unless the Central government first borrows and credits it to the Compensation Fund, it is not compensation. The Attorney General of India has himself given his opinion that compensation must be paid within the five years of transition period and cannot be delayed beyond these five years,” he said.

Reacting to the narrative that since majority states agree to the Centre’s option of additional borrowing, they can go ahead with it, Badal countered saying that the AG has also said unless all states agree to delay receiving compensation beyond five years, it cannot be affected. “Is this what the Constitution of India and Compensation Act imagined — to leave dissenting states to fend for themselves?” he said.

In a veiled jibe, Badal said he shuddered to think of a situation where any state were to cite today’s precedence later and amend the GST laws later, imposing their own rates of GST or grant exemptions, on the grounds that the Council’s recommendations are not binding on legislature. “I hope the Council will rise above immediacy and guide itself by law rather than expediency,” he said.