The GST council also decided to extend the compensation cess beyond June 2022.
Compensation cess collected this year so far, amounting to approximately Rs 20,000 crore, will get disbursed to all states tonight, finance minister Nirmala Sitharaman said on Monday. The GST council also decided to extend the compensation cess beyond June 2022
Briefing reporters after the GST meeting, Sitharaman said that the GST Council has taken up the long-pending issue of Integrated Goods and Services Tax.
The decision to release the cess was taken at the 42nd Goods and Services Tax (GST) Council meeting chaired by the Union finance minister on Monday.
Minister of State (MoS) for Finance Anurag Thakur and Finance Ministers of States and Union Territories (UT) were also present at the meeting.
So far, 21 state governments have opted to borrow ₹97,000 crore to bridge the shortfall in revenue from GST rather than borrow the entire deficit of ₹2.35 lakh crore, the two officials told HT, requesting anonymity.
The government has estimated that ₹97,000 crore would be the shortfall accruing on account of GST implementation issues and the rest because of the crisis caused by the Covid-19 pandemic, and prompted the states to borrow from the market to cover the deficit.
In the previous GST Council meet held on August 27, the Union government gave two borrowing options to states to meet the revenue shortfall — states would not have to repay either the principal or interest amount if they borrow only ₹97,000 crore to meet the GST revenue gap; they would have to bear significant interest costs if they choose the larger borrowing option of ₹2.35 lakh crore.