Chandigarh, Aug 21 : Punjab Finance Minister Harpal Cheema has demanded that the Central government release compensation of Rs 50,000 crore to the state to cover losses after GST implementation.

After participating in the two-day meeting of the GST Ministerial Group on health and insurance, rationalising rates, and compensation cess, Cheema said that since the implementation of GST in 2017, Punjab has suffered a total financial loss of Rs 1,11,045 crore.

He said that despite receiving approximately Rs 60,000 crore as compensation from the Centre, Rs 50,000 crore "is still pending".

The Central government had announced a five-year compensation package to states in lieu of financial losses incurred due to GST implementation, but this compensation has now been discontinued.

He said while the Punjab government is not opposed to the rationalisation of Goods and Services Tax (GST) rates, the Union government must take responsibility for the resulting financial losses to the states.

He said the BJP-led Central government "is continuously undermining the financial structure of states, which is a significant attack on the federal structure of the country".

Cheema said now the Central government "is even evading the release of funds to Punjab". Apart from GST, Rs 8,000 crore of rural development funds and over Rs 1,000 crore under the Prime Minister's Road Scheme are also being withheld, he alleged.

When the GST was implemented, all states stood united with the country, but now, when the issue of compensating states for financial losses arises, the Centre turns a blind eye, he said.

He said the Central government has made 27 amendments to the GST so far and has adjusted the rates 15 times.

"Now, Prime Minister Narendra Modi has proposed a new tax structure with two-tier rates of five per cent and 18 per cent," he said, emphasising that even "if these new GST changes are implemented, the Central government should take responsibility for compensating states for financial losses".

Lashing at the BJP-led Union government for repeatedly making changes to the GST system without reaching a definitive solution, Finance Minister Cheema said in a statement that this uncertainty "leads to constant harassment of taxpayers and a systematic breakdown of the country's financial framework".

He pointed out during a recent meeting on the Compensation Cess, the Centre informed that the loan repayment would be completed by October 31, and that the special tax on sin goods, which was a source of compensation for states, would also be reduced.

/IANS