Former Finance Minister P Chidambaram tweeted on the GST Council assembly end result at this time (File)

New Delhi:

Congress MP P Chidambaram has congratulated the ten states that “stood agency and rejected” the central authorities’s suggestion they borrow cash to offset GST compensation as a consequence of them – a topic that has emerged as a sore spot between a cash-strapped centre and state/UT governments.

In a sequence of tweets posted Tuesday afternoon, Mr Chidambaram (who served as Union Finance Minister within the Congress-led UPA authorities) stated that as a result of it was the centre that was liable to pay, “naturally the onus of discovering the sources additionally falls on the central authorities”.

“I praise the 9 or 10 states that stood agency and rejected the 2 choices given by the centre to bridge the hole in GST compensation cess. Legal responsibility to offer GST compensation to the complete extent falls on the centre as reluctantly admitted by the Finance Minister yesterday,” Mr Chidambaram tweeted.

“Naturally, the onus of discovering the sources additionally falls on the centre. It’s unfair and unjust to ask states to borrow the cash. States should stand agency on the subsequent assembly on October 12,” he added.

Late Monday evening, after a marathon assembly of the forty second GST Council, Finance Minister Nirmala Sitharaman stated no consensus had been reached on mode of compensation of complete compensation due – round Rs 97,000 crore (rising to Rs 2.35 lakh crore together with Covid-related reduction).

A call on this matter was deferred until the following assembly on October 12. The Council did, nevertheless, launch Rs 20,000 crore as GST compensation due for this 12 months.

At yesterday’s assembly, held through video convention due to the pandemic, round 10 states as soon as once more refused the centre’s suggestion that they borrow to settle dues. Twenty-one states (Puducherry was the one Congress-ruled state on this record) accepted one of many two borrowing proposals.

The opposing states stated their refusal was a matter of regulation and never majority in parliament – a swipe on the ruling BJP that has been criticised for forcing payments by parliament with superior numbers.

States which have opposed the borrowing proposal embody these dominated by the Congress (which has accused the centre of sovereign default) and Kerala and Bengal. A number of of them earlier wrote to Prime Minister Narendra Modi on this difficulty, reminding him of “constitutional duties”.

In an earlier assembly the Council had stated states might borrow cash in lieu of compensation due – both Rs 97,000 crore or the complete Rs 2.35 lakh crore. State governments crucial of this proposal stated the compensation of those loans would solely add stress to already fragile economies.

Forward of Monday’s assembly Mr Chidambaram tweeted: “States should stand agency on the rejection of the 2 meaningless choices… and demand the centre discover the cash and pay the promised compensation”.