States, including ones ruled by the BJP, made a strong case for extension of compensation cess beyond the June 30 deadline at the GST Council meeting. At the end of the meeting, the impression they carried back was that their arguments will be further discussed and paid due heed to.

Talking to BusinessLine, Kerala Finance Minister KN Balagopal said, “I don’t know if the deadline is not getting extended. We certainly hope this issue will be resolved because almost every state has requested an extension. Some of us thought it should be five years, others suggested two years… The Finance Minister (Nirmala Sitharaman) gave us a patient hearing. I’m very hopeful it would be resolved.”

Protection revenue provision

Chhattisgarh Finance Minister TS Singh Deo has come up with a solution in case the protected revenue provision is not continued. “If you are not extending this regime, the 50 per cent formula for CGST and SGST should be changed to SGST 70-80 per cent and CGST 20-30 per cent. I have mentioned it in my communication to the Finance Minister because unfortunately, because of my contracting Covid-19, I could not attend the Council meeting,” Singh Deo told BusinessLine.

BJP-ruled Uttarakhand too has pitched for extension. “We consider the PM as our own, from our own State. We are a young State with limited resources. I have apprised the FM of our difficulties and I am sure a way will be found to compensate us,” said Uttarakhand FM Premchand Aggarwal.