Faults formula pertaining to devolution of IGST balance
Finance Minister Yanamala Ramakrishnudu on Saturday expressed concern that the Integrated GST (IGST) balance, up to an extent of ?1 lakh crore lying as on March 31, was distributed among the States to an extent of 42% as per the Finance Commission’s devolution formula after putting the entire amount in the Consolidated Fund of India.
At the 31st meeting of the GST Council in New Delhi, he said a sum of only ?50,000 crore should have been deposited in the Consolidated Fund and ?21,000 crore devolved to the States. The balance (?50,000 crore) should have been directly distributed to the States.
‘Loss to A.P.’
Had it been done so, the States would have got ?71,000 crore, instead of ?42,000 crore, he observed.
The Centre got ?29,000 crore additionally at the cost of the States, he said. Andhra Pradesh lost ?1,000 crore on that account during 2017-18, Mr. Ramakrishnudu stated, demanding that the amount be released immediately.
Mr. Ramakrishnudu insisted that since the finalisation of GST rates was the prerogative of the GST Council by virtue of it being a constitutional body, the Prime Minister’s announcement that the tax rates of 99% of the items would be brought to 18% or below was not appropriate. The Minister requested the Council to re-examine the proposal for exemption/reduction of tax on tamarind, fried gram, textiles, handloom goods, fishnets, etc.