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GST shortfall: Centre offers 2 choices to compensate states

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NEW DELHI: The Items and Companies Tax (GST) Council on Thursday held an important meet to deliberate on the methods to make up for the GST shortfall in states’ revenues.
Breifing the media after the 41st assembly of the GST Coincil, income secretary Ajay Bhushan Pandey mentioned that GST revenue has been severely impacted because of Covid and the shortfall for FY21 stands at Rs 2.35 lakh crore.
Finally, the Council has offered two choices to compensate states.
The primary choice present a particular window to states, the place the GST Council in session with RBI, will present Rs 97,000 crore at an affordable rate of interest. “This cash can then be repaid after 5 years from assortment of cess,” the finance secretary mentioned.
Within the second choice, the complete GST compensation hole of Rs 2,35,000 crore of this 12 months will be met by states, in session with RBI. “These choices shall be despatched to states for a view inside 7 days and can apply for this fiscal 12 months solely,” the minister added.
The income secretary additionally mentioned that authorized views on the matter had been sought from the Lawyer Common of India and he was of the opinion that shortfall in GST collections can’t be met from Consolidated Fund of India.
Chatting with media, finance minister Nirmala Sitharaman mentioned that the Centre has instructed the states that it’s going to facilitate speaking with RBI and assist getting G-security-linked rates of interest so that every state doesn’t need to battle for loans.
The Congress and the states dominated by non-NDA events have pushed the Centre to fulfill its statutory obligation of overlaying the deficit. The Union authorities cited a authorized opinion to say it had no such obligation if there was a shortfall in tax collections.

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