GST council meet on compensation issue discussions issue of borrowing tuta | GST Council meeting over: There is no talk on reduction in GST of states, Finance Minister said – Central government cannot raise loans for states

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Digital Desk, New Delhi. The dispute over compensation to states in the Goods and Services Tax (GST) could not be discussed at the 43rd GST Council meeting held on Monday. After the meeting, Union Finance Minister Nirmala Sitharaman said that there was no consensus to meet the GST deficit of the states. He said that 21 states of the country agree to Option-One, while the rest of the states do not agree with the proposal of the Center. It will be decided after discussion with other states. He said that all the states have appreciated the loan facility for 50 years.

Nirmala Sitharaman said that the proposal of the Center is within the purview of the law, but if some states are not approved, then let’s see what the solution is now. States opposing the proposal of the Center include Delhi, Kerala, West Bengal, Telangana, Chhattisgarh, Tamil Nadu. In the meeting, the Finance Minister said that the Central Government cannot take loans from the market to compensate for the decrease in GST revenue of the states, as it may increase the cost of debt in the market. After the meeting of the GST Council, the Finance Minister said that there was no consensus on the modalities to compensate for the reduction in the GST revenue of the states.

Please tell that on Monday, the matter was discussed for the third time by the council headed by Nirmala Sitharaman and the state finance ministers. Nirmala Sitharaman addressed the media after the GST Council meeting on Monday. He was also accompanied by Minister of State for Finance Anurag Thakur. Finance ministers of all the states and union territories were also present in this meeting. Along with this, all senior officials of the central and state governments were also in this meeting.

Such situation due to corona crisis
Earlier, the GST Council met on 5 October. After this meeting, Nirmala Sitharaman said that we are not denying the compensation amount to the states. He said that such a situation has arisen due to the Corona crisis. No one had imagined such a situation before. The current situation is not such that the central government is seizing the fund, and refusing to give. Funds have to be borrowed.

Compensation cess continues
The Finance Minister said that the Compensation Cess on luxury and many other items will be extended from June -22 onwards. That is, on products like cars, cigarettes, the cessation cess will continue, it has been decided to save the states from harm. According to the rule, it was to take only five years after the GST came into force. It is worth noting that the states are demanding from the Central Government to pay the outstanding compensation of about Rs 2.35 lakh crore GST. In return, the Center has given them two options to borrow, but the state is divided over the Centre’s offer.

What is the mathematics of compensation
States owe GST compensation of around Rs 2.35 lakh crore, but the math of the central government is that out of this, the loss of about 97,000 crore is due to the implementation of GST, the remaining revenue loss of about 1.38 lakh crore corona epidemic. And is due to lockdown.

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