Centre should compensate loss of revenue to Telangana due to GST rate rejig: Revanth Reddy

Hyderabad: Telangana Chief Minister A Revanth Reddy on Monday demanded that the Central government compensate for the loss of revenues due to the recent GST rate rationalisation, for five years.

Addressing a press conference, Reddy reminded that when GST was introduced, the Centre had promised to compensate for revenue losses if the tax growth rate fell below 14 per cent.

"Now also, if there is any revenue fall due to the change in slabs, the Central government should fill that gap. Because state plans are based on the expected income. Now the centre has taken a decision (on rate rationalisation). It is the centre’s responsibility to fill the revenue gap for all the states which may face a shortfall in revenues," Reddy said.

He said that already, Deputy CM Bhatti Vikramarka gave representation to the Centre after the GST Council meeting.

Reddy said he is appealing to Union Minister G Kishan Reddy, stating that the Deputy Chief Minister will write a letter detailing Telangana’s revenue losses, and that it is the Union Minister’s responsibility to take up the issue with Prime Minister Narendra Modi and ensure the state is compensated.

"The state government is demanding that the Centre has to compensate for the revenue loss," the CM asserted.

Deputy Chief minister Mallu Bhatti Vikramarka had earlier said the state would lose about Rs 7,000 crore tax revenue annually with the GST structure and demanded that the Centre should compensate it.