West Bengal finance minister Amit Mitra on Thursday demanded that Union finance minister Nirmala Sitharaman should immediately convene a meeting of the GST Council and release the pending compensation for the loss incurred by states under the goods and services tax.

“This is in violation of federalist policy of India. We talk about cooperative federalism. This is uncooperative federalism, wherein you are not paying the states," Mitra told reporters in New Delhi.

On Wednesday, finance ministers of Rajasthan, Kerala, Delhi, Punjab and West Bengal said they were facing financial stress due to the delay in paying compensation for August and September, the first such instance since the indirect tax system was rolled out in July 2017.

“I have also written a letter to hold a GST meeting on revenue augmentation. West Bengal has not been paid ₹1,443 crore for August and September. Kerala ₹1,600 crore and Punjab is ₹3,100 crore. Five (finance ministers) of us were standing there and we found that close to ₹10,000 crore was between us. My estimate is unpaid dues without covering October may be in the range of ₹40,000 crore," he added.

Mitra said the delay was in violation of the constitutional provision. “What happened to that money? Is it stashed away somewhere else? Is the money not there? Only way we can know is through a GST Council meeting, which is the official authority on this."

The West Bengal finance minister said he had written to the finance minister on the frauds happening in GST filings twice, last on 18 November, requesting her to hold a GST Council meeting to discuss how to correct it. “It was the last agenda in Goa, but was not discussed. There is a fraud of ₹44,000 crore, but it was not discussed. And, since then, we did not have a GST Council meeting," he added.

Calling the current economic downturn “pathetic", Mitra said it is not a cyclical correction for businesses, but a loss of faith. “It is wrong policy-induced growth recession due to a structural attack on the fundamentals of the Indian economy through demonetization and an ill-conceived GST. My former professor Manmohan Singh had recently said that there was a trust deficit. Every part of the economy requires trust. What the country has to do now is to look deeper into the broken supply chains and broken trust," he added.

Source: LiveMint