Punjab’s Urgent Appeal: Rs. 50,000 Crore for GST Relief
BJP-led Central Government Undermining States’ Financial Stability
Chandigarh/New Delhi, August 21
Punjab Finance Minister Advocate Harpal Singh Cheema has urgently demanded that the Central Government release Rs. 50,000 crore to compensate Punjab for financial losses incurred since the implementation of the Goods and Services Tax (GST) in 2017.
Speaking after a two-day GST Ministerial Group meeting on health, insurance, rate rationalization, and compensation cess, Cheema revealed that Punjab has faced a cumulative financial loss of Rs. 1,11,045 crore due to GST. While the Centre has provided approximately Rs. 60,000 crore in compensation, Rs. 50,000 crore remains pending. The Central Government’s five-year compensation package for GST-related losses has now been discontinued, leaving states in financial distress.
Cheema clarified that while the Punjab Government supports rationalizing GST rates, the Centre must bear responsibility for the resulting financial losses to states. He accused the BJP-led Central Government of systematically weakening states’ financial frameworks, calling it a direct assault on India’s federal structure. Additionally, he highlighted that apart from GST dues, the Centre is withholding Rs. 8,000 crore in rural development funds and over Rs. 1,000 crore under the Prime Minister’s Road Scheme.
“When GST was introduced, states unitedly supported the nation, but now, when it’s time to compensate for their losses, the Centre is ignoring its obligations,” Cheema stated.
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He noted that the Central Government has amended GST 27 times and adjusted rates 15 times, with Prime Minister Narendra Modi now proposing a new two-tier tax structure of 5% and 18%. Cheema stressed that any new GST changes must include provisions to compensate states for financial losses.
Criticizing the Centre’s repeated GST modifications without a clear resolution, Cheema said this uncertainty burdens taxpayers and destabilizes the nation’s financial system. He cited the recent Compensation Cess meeting, where the Centre announced that loan repayments would conclude by October 31, and the special tax on sin goods—a key compensation source for states—would be reduced.
Cheema labeled the GST rate rationalization as irresponsible, pointing out contradictions like granting GST exemptions for health and insurance while reducing the sin tax on raw tobacco from nearly 100% to 40%. He called this reduction an “anti-social” move, warning that such erratic changes to the tax structure could severely harm the nation. Dismissing the Centre’s assurances as empty promises, Cheema reiterated Punjab’s demand for immediate release of the pending compensation to safeguard the state’s financial stability.
