Punjab Faces Rs 1.11 Lakh Crore Loss due to GST Implementation, Says Finance Minister

The state of Punjab has experienced a massive financial setback amounting to Rs 1.11 lakh crore over eight years following the introduction of the Goods and Services Tax (GST), Finance Minister Harpal Singh Cheema revealed on the Assembly floor. Speaking on the final day of the state legislative session, Cheema highlighted significant disparities in revenue expectations versus reality.

Cheema pointed out that Punjab's revenue neutral rate before GST was set at 18.3 percent, a figure considerably higher than the national average of 14 percent. Since GST's rollout, the state has received only Rs 61,000 crore in compensation, leading to substantial revenue losses. The Finance Minister criticized the central government, accusing it of ignoring state-level financial crises due to its majority position.

The minister urged a revision of policies and highlighted concerns about the federal structure, citing the discontinuation of compensation cess in 2022. Cheema also mentioned the original GST proposal by former Union Finance Minister P. Chidambaram in 2006, stressing the need for a more balanced tax framework to prevent states from depending too heavily on central allocations.

(With inputs from agencies.)