The Jharkhand government will claim from the Centre Rs 1,561 crore towards payment of arrears in respect of GST (Goods and Services Tax) compensation related to 2020-21.

Jharkhand finance minister Rameshwar Oraon said this when asked if the state government would have any specific demand during the 43rd meeting of the GST Council that will be held virtually after a long gap through video conferencing on Friday.

Though it is expected to meet at regular intervals, the GST Council, the apex decision making body in respect of GST-related issues, had not met for nearly eight months.

This prompted Bengal finance minister Amit Mitra to write to Union finance minister Nirmala Sitharaman for organising it without further delay, resulting in the virtual meeting slated for Friday.

“Besides, we will also seek extension of time period for paying GST compensation that will be paid to the states till June 2022,” Oraon told The Telegraph.

“The Covid situation has worsened the economy of all states, including ours and there’s a need for extension of five-year compensation period that will expire next year,” the minister further said, adding they would demand an extension for another five years till June 2027.

“There will certainly be an alarming shortfall in state’s revenue earning,” Oraon said, adding the state’s scope for earning from taxes was reduced after introduction of GST and the compensation now comprised a major chunk of the state’s total revenue earning.

A recent report suggested that the shortfall during 2021-22 was expected to be around Rs 1.56 lakh crore, according to an Union government projection, adding that the Union government may also propose borrowing to meet the shortfall.

“No loan, we would rather prefer grants in that case,” minister Oraon categorically said when the issue was raised.

“We will also demand exemption of GST on essential Covid drugs and equipments related to treatment of coronavirus patients,” he said while informing about the state government’s another demand to be placed during Friday’s meeting.

While saying this, Oraon echoed his Bengal counterpart as Mitra, in his recent letter to Union finance minister, had urged for exemption of GST and customs duty on essential drugs, vaccines and equipments required for the Covid-19 treatment.

Favouring zero-rated tax in such cases, the Bengal minister argued there would be no adverse impact on prices for customers.