Centre ignoring GST relief law, Constitution: Manpreet Badal

Tribune News Service

Chandigarh, October 12

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

At a GST Council meeting in Delhi today, Punjab Finance Minister Manpreet Singh Badal reportedly minced no words as he made the state’s stand clear that it wanted the compensation of Rs 9,000 crore that the Centre owed, as per the original 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 seven 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 Union Government first borrows and credits it to the Compensation Fund, it is not compensation. The Attorney General of India has opined 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 a majority of the states agree to the Centre’s option of additional borrowing, they can go ahead with it, Badal countered saying the AG had also said unless all states agreed to delay receiving compensation beyond five years, it could not be effected.

“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 states could cite today’s precedence later and amend the GST laws, imposing their own rates of GST or grant exemptions on the grounds that the council’s recommendations were not binding on legislature. “I hope the council will rise above immediacy and guide itself by law rather than expediency,” he said.

Form mechanism to adjudicate disputes

Manpreet Singh Badal has stressed the need for establishing a mechanism to adjudicate disputes between the Centre and state/states or between Centre and state/states on one side and one or more states on the other, arising out of the recommendations of the GST Council or implementation of thereof.