Himachal Pradesh Seeks GST Compensation Amid Revenue Losses at 55th GST Council Meeting
Bilaspur: The 55th meeting of the GST Council, held in Jaisalmer under the leadership of Union Finance Minister Nirmala Sitharaman, brought together key stakeholders to discuss various important issues related to GST implementation across India. Himachal Pradesh’s delegation was led by Technical Education Minister Rajesh Dharmani, who brought attention to several pressing concerns, including the issue of GST compensation.
Minister Dharmani raised a significant demand for the establishment of a dedicated system to compensate Himachal Pradesh for the revenue losses incurred due to the Goods and Services Tax (GST). He emphasized that, while the state has made considerable efforts to implement GST efficiently, it has suffered financially as a result of relinquishing its right to levy certain taxes. Dharmani pointed out that the state, which is a major producer of medicinal drugs and contributes substantially to environmental protection, should be granted special compensation to offset the financial impact.
Drawing on the example of the Kyoto Protocol, the Technical Education Minister argued that Himachal Pradesh’s role in maintaining environmental balance should be recognized through compensation. His appeal for fair treatment highlighted the state’s unique contribution to both the national economy and ecological sustainability.
In addition to the GST compensation issue, Dharmani also raised concerns over a recent demand letter issued by the CGST department to toll contractors in Himachal Pradesh. The letter, which called for a Rs 200 crore payment, was in dispute, as toll services are tax-exempt under GST Notification No. 12/2017. The Union Finance Minister assured that the issue would be addressed promptly.
Furthermore, during the meeting, the reduction of tax burdens on the insurance sector was also discussed. Minister Dharmani strongly advocated for the exemption of GST on health and term insurance plans for women, children, and senior citizens. Additionally, he requested GST exemptions for the first 10-15 years of research and development activities to support innovation and growth in various sectors.
The discussions at the GST Council meeting marked an important step toward resolving the financial challenges faced by Himachal Pradesh and other states, with a focus on ensuring that economic contributors like Himachal are adequately compensated for their efforts.
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