india

Updated: Dec 14, 2019 19:23 IST

The Shiv Sena on Saturday said if the Modi government failed to pay the Goods and Services Tax (GST) compensation; it could well be the trigger to set off a conflict between the states and the Centre.

The BJP government’s policies were responsible for the “economic anarchy” in the country, the Sena elaborated.

“The Centre had promised to pay Rs 50,000 crore to the states to compensate them on account of revenue loss due to the implementation of GST. But the states have not received the GST compensation for the last four months,” the party said in an editorial in ‘Saamana’.

“The money belongs to the states and any further delay can spoil their financial situation. The states will have to raise their voice against the Centre if their rightful share of resources is not passed on to them,” it added.

The Shiv Sena’s criticism comes just two days after Union Finance Minister Nirmala Sitharaman assured the Rajya Sabha that the Centre will honour its commitment over payment of GST compensation to states. The minister, however, did not specify by when the dues would be cleared.

Those states that surrendered powers to collect taxes on goods and services after local levies got subsumed into the GST from July 1, 2017, was through laws guaranteed to be paid for any loss of revenue in the first five years after GST was implemented.

According to the Sena, the states, which focus on manufacturing, suffered after the octroi collected by the municipal corporations was abolished. Even then the Centre had promised that compensation would be paid, but nothing has been done so far, it said.

Profit-making PSUs, like Bharat Petroleum, are being sold and the Centre does not have money to pay Rs 500 crore to Air India that were spent on the prime minister’s foreign tours, it said.

“Hence, it is doubtful that the states would get their share of GST compensation,” the party said.

“All the states are feeling that the Centre has not honoured its commitment of paying them the GST compensation.

If this situation continues, there is likely to be a states versus Centre confrontation,” it added.

(With inputs from Agencies).