West Bengal finance minister Amit Mitra, on Tuesday said he is concerned that GST cess, amounting to Rs 11,000 crore for February-March 2020 will not be paid by the Centre as it has fallen severely short of its targeted collection.
“My deepest concern is for February-March, we will not get paid,” Mitra said at an event organised by the CII here.
He said that while the Centre had targeted GST collection at 21 per cent, the actual figure has been hovering at 1.5 per cent.
According to Mitra, while the state is faced with financial issues and an alternative plan is being worked out by the state government, the Centre has been increasing cess and surcharges from where states do not get any share.
“The states are getting squeezed. The cess is being constantly increased – it was six per cent in 2013-14 and now it stands at 18 per cent. This is against the federal structure of the country. It is a paradigm shift and federalism in the country is being challenged”, he alleged.
Unlike taxes, states do not get any receivables from the Centre on cess and surcharges.
The minister alleged that on account of the faulty design in the GST structure, taxation fraud is going up.
“People are forming false companies to defraud GST collection. GST was implemented in a haste without doing any beta testing. This has resulted in fraudulent transactions taking place across the country. Suspicious transactions are also going up”, he said.
Union minister of state for finance, Anurag Thakur had stated in the Parliament that unrecovered penal interest on GST is to the tune of Rs. 46,000 crore and the amount of fraud is pegged at Rs. 44,000 crore.
The unrecovered penal interest, according to Mitra, is on account of delayed GSTR-III-B filing by traders.
Mitra furthered that the country is in “serious economic crisis” as stagflation has hit the economy and measures need to be taken to address the situation.