Punjab Finance Minister Cheema criticises Centre’s GST rate rationalisation, terms it ‘irresponsible’

Criticising the Goods and Services Tax (GST) rate rationalisation and terming it “irresponsible”, Punjab Finance Minister Harpal Singh Cheema has asked the Central government to immediately release compensation of ₹50,000 crore to Punjab to cover losses after GST implementation.

After participating in the two-day meeting of the GST ministerial group on health and insurance, rationalising rates, and compensation cess, Mr. Cheema said that since the implementation of GST in 2017, Punjab has suffered a total financial loss of ₹1,11,045 crore.

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He said that despite receiving approximately ₹60,000 crore as compensation from the Centre, ₹50,000 crore is still pending. The Central government had announced a 5-year compensation package to states in lieu of financial losses incurred due to GST implementation, but this compensation has now been discontinued, he said.

“While the Punjab government is not opposed to the rationalisation of GST rates, the Union government must take responsibility for the resulting financial losses to the states. The BJP-led Central government is continuously undermining the financial structure of states, which is a significant attack on the federal structure of the country. The Central government is even evading the release of funds to Punjab. Apart from GST, ₹8,000 crore of rural development funds and over ₹1,000 crore under the Prime Minister’s Road Scheme are also being withheld,” he said.

Hitting out at the BJP-led Union government for repeatedly making changes to the GST system without reaching a definitive solution, Mr. Cheema said this uncertainty leads to constant harassment of taxpayers and a systematic breakdown of the country’s financial framework.

The gambling with the tax structure would cause massive harm to the nation, he said, dismissing the Centre’s promises as mere rhetoric.