NEW DELHI: Today’s GST Council meeting promises to be a stormy affair with the center and opposition-ruled states not only divided on compensation for a “shortfall” in collections, but also on the question of an authority dispute resolution driven by opposition-ruled states.
Punjab first echoed the lawsuit shortly after the Center introduced the new mechanism for borrowing and expanding the applicability of the rate of compensation. But the proposal has been rejected by the government, and officials argue that it was rejected in 2011, with the permanent finance committee headed by former FM Yashwant Sinha and later by the GST-enabled committee chaired by MP CM Sushil Kumar Modi of Bihar. also rejecting it.
“The idea of the GST’s dispute resolution authority runs counter to the basic principles of the Constitution, which are based on the principle of separation of powers and clearly define the sovereignty of the legislature. Such a proposal, although already rejected by Parliament, would be akin to suggesting that if there are some disputes between political parties in Parliament or, for example, between Rajya Sabha and Lok Sabha, such disputes will be referred to a judicial body, “said a source.
The constitutional amendment to GST mandated that the GST Council, made up of state and Union finance ministers, develop a mechanism. Hence, the all-powerful decision-making body has referred some of the issues to various ministerial panels and committees, made up of officials, to achieve consensus on some of the controversial issues.
But the main flash point is expected to be the Center’s decision to help states borrow Rs 97,000 crore to overcome the compensation deficit, when the overall gap is estimated at more than Rs 2.3 lakh crore. While the Center aims to have the numbers through the support of 21 Union states and territories to back its plan, opposition-ruled states are not on board yet.
On video: GST Council meets to discuss the issue of compensation, the mechanism to resolve the dispute
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