Himachal Pradesh Government Invokes Kyoto Protocol for GST Compensation from Centre

The Himachal Pradesh government has requested the central government to consider compensating hilly states for revenue losses incurred due to the Goods and Services Tax (GST) implementation. They suggested a compensation model similar to the Kyoto Protocol. This international agreement, established in 1997, encourages developed countries to reduce greenhouse gas emissions while rewarding developing nations for adopting eco-friendly practices.

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During the 55th GST Council meeting in Jaisalmer, Rajasthan, Technical Education Minister Rajesh Dharmani highlighted the need for compensation. He urged Union Finance Minister Nirmala Sitharaman to introduce measures that would help states like Himachal Pradesh recover from GST-related revenue losses. An official statement confirmed Dharmani's appeal at the meeting.

GST Compensation and Revenue Concerns

Dharmani, representing Himachal Pradesh at the meeting, also addressed concerns regarding Rs 200 crore demand notices issued by Central GST authorities to toll lessees in the state. He argued that these notices should be annulled based on legal grounds and sought further clarification on the matter. The minister stressed the importance of resolving this issue promptly.

In addition to compensation requests, Dharmani advocated for exempting individual health and term insurance policies from GST, particularly those benefiting women, children, and senior citizens. He emphasised that such exemptions would provide significant relief to these vulnerable groups.

Proposals for Economic Growth and Environmental Conservation

The minister also proposed exempting GST on research and development expenses for both public and private entrepreneurs for an initial period of ten to fifteen years. This move aims to encourage innovation and economic growth within the state by reducing financial burdens on research initiatives.

Dharmani suggested establishing satellite towns in Himachal Pradesh by amending provisions under the Forest Conservation Act. He noted that diverting forest land is essential for creating these towns, which could boost regional development while maintaining environmental balance.

Support for Agriculture and Rural Infrastructure

To protect local apple growers, Dharmani urged an increase in customs duty on apple imports from 50% to 100%. This measure would help safeguard domestic agriculture against foreign competition. Additionally, he highlighted the need for funding sewerage treatment facilities in rural areas, stressing their importance for improving sanitation and public health.

The Himachal Pradesh government's proposals reflect a comprehensive approach to addressing economic challenges while promoting sustainable development. By seeking compensation akin to the Kyoto Protocol model, they aim to balance fiscal needs with environmental responsibilities.