The finance minister Nirmala Sitharaman on Friday said that the government will not increase taxes on states to make up for the revenue losses incurred due to coronavirus pandemic.

Nirmala Sitharaman said that the Centre is not going back on its promise of paying the Goods and Services Tax (GST) compensation to states, according to PTI. She said, “Even if we are in an act of God situation, but we will discuss in the Council how to give compensation to the states… The Council will take a call on how to borrow to meet the (revenue) gap.”

Centre had given the option to the states two options where they could either borrow Rs 97,000 crore from via a RBI-facilitated special window or Rs 2.35 lakh crore from the market along with the extension of compensation cess levied on luxury, demerit and sin goods beyond 2022 to pay back the borrowed sum.

States are facing a Rs 2.35 lakh crore shortfall in GST revenue this fiscal year.

Sitharaman said that Opposition is hurling ‘irresponsible comments’ at a ‘responsible government’ and reiterated that Centre shall not renege on its promises made to states regarding compensation payment. She further added, “We are ready to discuss. We are taking everyone together and the Council will find a view. This is my optimistic expectation. The Centre is not reneging (from its commitment)”

Sitharaman also took a dig at the Opposition for ridiculing her ‘Act of God’ remark. She asked the Lok Sabha speaker Om Birla that how come in courts the term ‘force majeure’ is acceptable to explain extraordinary circumstances but the term ‘Act of God’ has become an object of ridicule.

She said, “Many people spoke on the GST compensation issue (and) my statement of Act of God was referred several times. I am happy (about) that. People like using latin expression (like) force majeure, for expressing extraordinary situations. But a simple woman finance minister saying the Act of God is taken sarcastically. What is this sir?”

She further added, “I like this condescension.”

The finance minister presented the The Supplementary Demands for Grants for 2020-21 and The Demands for Excess Grants for 2016-17 bills which were passed by the Lok Sabha.

(with PTI inputs)