Some states have objected to the proposed borrowing plan of the Centre to fund the GST revenue shortfall and they are being requested to exercise either of the two options, Minister of State for Finance Anurag Singh Thakur said on Tuesday.
The GST collections in September 2020 is 4 per cent higher than the same month last year.
Some states have objected to the proposed borrowing plan of the Centre to fund the GST revenue shortfall and they are being requested to exercise either of the two options, Minister of State for Finance Anurag Singh Thakur said on Tuesday. The Centre late last month gave two options to states to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 lakh crore from market and also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing.
“Some states have objected to the proposed two options. They are being requested to exercise one of the two options,” Thakur said in a written reply to a question in the Rajya Sabha. In reply to a separate question, Thakur said the provisional Goods and Services Tax (GST) compensation due to the 31 states and UTs stands at Rs 1,51,365 crore in the April-July period. “GST compensation cess collected in current FY 2020-21 is not sufficient to release the admissible GST compensation for period April-July, 2020.
“Moreover, the GST compensation cess collected till July 2020 has been partly utilized for the purpose of GST compensation released to states for the period till March 2020,” he added. In the current fiscal year, states are staring at a staggering Rs 2.35 lakh crore GST revenue shortfall. Of this Rs 97,000 crore is on account of GST implementation and remaining Rs 1.38 lakh crore is estimated to be the economic impact of the COVID-19 pandemic.
Chief Ministers of 6 non-BJP ruled states/UT – West Bengal, Kerala, Delhi, Telangana, Chhattisgarh and Tamil Nadu – have written to the Centre opposing the options which require states to borrow to meet GST shortfall.