Centre will not renege on promise of GST compensations, FM assures states

Union Finance minister Nirmala Sitharaman on Monday assured states that the Centre will not "renege" on the promise of GST compensations.

The delays to pass on the money are due to a slip in collections and the states have nothing to be embarrassed about, she said.

The remarks come at a time when states like Maharashtra and Kerala have been demanding the compensation sooner.

"It is certainly their right, I am not denying. At the same time, I am also making clear to say that I am not reneging on that. States will be given. We are certainly not reneging on it.

"I admit that the payments which had to go the compensation head have not been given for two months slot," Sitharaman said, addressing the Times Network's India Economic Conclave through video conferencing.

The GST Council, the highest decision making body for indirect tax, is slated to hold its meeting on December 18.

"I do not want them (states) to feel embarrassed because it's not their fault nor is it personally my fault," she said, admitting that the GST collections have been much lower than expectations.

She attributed the dip in collections to a slip in GST filing due to natural calamities and also due to a slowdown in consumption that has a direct impact on the collections.

"I am working with the states. Each of them have taken a lot of effort from their end to improve the GST collection. I guess with their efforts and the centre and revenue department officials...the prospects of improving GST collection is likely to go up," she said.

When asked about reports of cuts in GST rates, Sitharaman said there is no such call to review.

"I don't think, I am even talking about raising or rationalising the slabs at all at this stage. But Eventually at some time the GST Council would want to talk about it, but I am not readying myself for this particular meeting on this particular issue," she said.