NEW DELHI: Disagreements between the Center and the state over the Goods and Services Tax (GST) compensation amount were raised at a meeting of the GST Council today. The Center has proposed to resolve this issue through loans. Earlier, the states were informed of the current status of the GST. Revenue Secretary Ajay Bhushan Pandey said the GST would be Rs 2.35 lakh crore less than the target set this year. The GST collection will be severely affected by the effects of the corona epidemic. In fact, the GST collection of about Rs 7,000 crore will be reduced. The states have been given two options for compensation based on this math. The first option is to set up a special window for the states in consultation with the Reserve Bank of India. Of this, states can borrow Rs 6,000 crore at affordable rates. They will repay that money after five years. The second option is that states can borrow a total of Rs 2.35 lakh crore from that special provision. The government has said that the limit set by the states on the debt of the states will be reduced by another 0.5% by repealing the F4RBM rule. “States have been given seven days to decide on these options,” Finance Minister Nirmala Sitharaman said. He described the current situation as an “act of God”.
Experts believe that the move to borrow from the Reserve Bank at lower interest rates is welcome. But if the option is considered in the eyes of the states, it could be said that there may be four other tougher conditions within it. This means that the issue of GST compensation has not been resolved. It will take more time for the two sides to reach an agreement. Further meetings need to be convened. If states reject the Centre’s proposal, the last option is for states to increase cessation. States can demand that more and more goods be brought to the Cessus area to increase the amount of Cesus and increase the amount of Cesus.
