In a letter to Prime Minister Narendra Modi, West Bengal Chief Minister Mamata Banerjee on Wednesday (September 2) said depriving states of GST compensation is an “attempt to undermine federalism” and called it a “betrayal of trust”.
She urged the prime minister not to belie the trust between the states and the Centre on the issue and asked him “not to allow an insufferable blow to the federalist polity of the nation by depriving the states of the GST compensation.”
“I am deeply anguished by the Goods and Services Tax (GST) imbroglio which tantamounts to a betrayal of the trust and moral responsibility of the Government of India towards the states, violating the very premise of federalism.
“This is a travesty and an abrogation of the fundamental basis on which the states gave up 70 per cent of their taxing powers, including the entire VAT regime, to usher in the GST regime,” Banerjee said in the four-page letter.
The chief minister added that the “agreed formula” for giving up taxing powers was the promise of full compensation of shortfall in GST collection for five years.
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