Finance Minister Harpal Singh Cheema revealed this in a press communiqué issued here today. He said that this decision would harm the states. They are already suffering losses due to the GST regime. He highlighted that Punjab has earned Rs 113 crore in FY 2022-23. Rs 105 crore was earned in FY 2023-24. Rs 75 crore was earned till November in the current fiscal year as VAT on Air Turbine Fuel.
Finance Minister Cheema further sought compensation for the Rs. 20,000 crore loss incurred by the state due to the implementation of the GST regime. He warned that if petroleum products transition from VAT to GST, states will face an unbearable fiscal crisis. He pointed out that Punjab’s VAT collection on petrol and diesel has been substantial. It amounted to Rs 3,600 crore on diesel and Rs 1,800 crore on petrol in FY 2022-23. Finance Minister Cheema emphasized that this VAT collection is crucial for the financial health of the states.
Cheema Advocates for GST Reform
On the issue of ‘Negative IGST Settlement’, Finance Minister Harpal Singh Cheema discussed the GST regime. cheema stated it poses a sudden burden on the states. He believes this needs immediate attention. He urged the Union Government to consider using the base year 2015-16. This would replace the preceding year for fixing the states share. Furthermore, Cheema advocated for making the Compensation Cess a continuous process. He suggested linking it to capital expenditure. This linkage would enable states to build their infrastructure.
Punjab Supports Andhra Pradesh’s Disaster Cess Levy
Punjab has extended strong support to Andhra Pradesh’s demand. They want to extend the Disaster Cess levy by 1 percent for two more years. This move aims to aid flood-affected areas. The Finance Minister suggested making it a continuous feature to assist states facing natural disasters. Additionally, Finance Minister Harpal Singh Cheema emphasized that the changes in the registration process will streamline it. These changes will effectively reduce the proliferation of bogus dealers.
Cheema Raises Issue on GST Intermediary Services
Additionally, Finance Minister Cheema brought to the attention of the GST Council an important issue. Removing clause (b) of section 13(8) of the GST Act would exempt intermediary services. These services are provided on behalf of offshore clients. We should not allow this. The council has deferred this agenda item for further deliberation. The council has decided to postpone the agenda for providing exemption on health and medical insurance premiums. Punjab issued a dissenting note.
