New Delhi: Karnataka on Monday presented data before the GST Council meeting to press for its claim for a fair share of compensation cess even as the Council decided to refer the matter to a Group of Ministers (GoM) for further action.
At the meeting, Revenue Minister Krishna Byre Gowda, who represented Karnataka, gave details on how the state faced “injustice” in getting GST compensation, despite it contributing substantial tax revenue.
Replying to a question on several states raising the issue of GST compensation cess, Union Finance Minister Nirmala Sitharaman said, “We have agreed to form a GoM, which will study every state. At the meeting, the Karnataka minister came up with figures which are applicable to his state. So, we have said whichever state wants to give its figures can do so. The group of secretaries and others can discuss it.”
Addressing the media after the meeting, she said, “There will be a group of ministers which will decide on how to go forward in the name of compensation cess. It shall no longer be compensation post March 2026, but that cess, how to go about it, what to do with it and so on by the GOM.”
CM Siddaramaiah had earlier alleged that Karnataka lost Rs 59,274 crore, due to unscientific implementation of GST.
He claimed despite writing three letters to Nirmala Sitharaman to seek an update on GST compensation, the Centre did not respond properly.
“Despite Karnataka’s substantial contribution of Rs 4.3 lakh crore in tax revenue every year, we receive just about Rs 50,000 crore from the Centre,” the CM had said.
Nirmala said Karnataka raised the issue of the modus operandi of IGST (integrated goods and service tax) and the state sought details on how it works, how it is calculated and how it is used for deploying resources.
“If any state wants, officials will explain to them about IGST calculation and distribution among states,” she said.
Last December, Siddaramaiah had written to Nirmala, seeking clarification and revised procedure on IGST provisional settlement.
Krishna Byre Gowda was not available for comment when DH tried to contact him.