MUMBAI: The

owes the cash-strapped state government Rs 8,500 crore in

. The newly minted non-BJP government in the state wrote to the Centre on Tuesday asking for settlement of dues.

The state plans to raise its demand at the next

Council meeting on December 18.

Sources say state borrowings had shot up by Rs 10,000 crore this year, mainly on account of the delay in GST compensation since August. In 2018-19, new borrowings by the state government stood at Rs 20,000 crore. In 2019-20, new borrowings between April and November alone amounted to Rs 22,500 crore, said sources.

The state is the top GST earner nationally, and accounts for 15% of the country’s GST revenue.

The state did not receive GST compensation of Rs 4,400 crore for August-September, which was due by October 15. It is also awaiting GST compensation of Rs 4,100 crore for October-November, which is to be paid by December 15.

So far, the state had filed claims for both periods with the Centre and sent a reminder for the payment of the August-September dues.

The Goods & Services Tax (Compensation to States) Act, 2017, provides for compensation to the states for loss of revenue resulting from the implementation of GST. If the revenue growth of states is lower than 14% annually, then the compensation is to be provided out of a fund. This fund gets money through the levy of a cess on products such as automobiles, pan masala and tobacco products. The GST compensation is to be provided to states till 2022.

Already, five oppositionruled states have issued a joint statement raising concerns about the delayed GST compensation payout for the August-September period. These states are Kerala, West Bengal, Delhi, Rajasthan and Punjab. They pointed out that GST comprised nearly 60% of the tax revenues of states and several states were facing deficits of up to 50% of the total GST. Such large deficits had the potential to disrupt the budget, said their statement.

The statement also raised the concern that states had agreed to cede their fiscal sovereignty into the GST only on the assurance of compensation from the Centre. They said the delayed payout had shaken their confidence.

Subsequently, union finance minister Nirmala Sitharaman clarified that the payout had been delayed because cess collections had been inadequate but the Centre would honour its commitment to the states.