Tribune News Service
New Delhi, August 27
“States have sought a week to deliberate on two options offered by the Centre to make up for the shortfall in GST collections”, mentioned Union Finance Minister Nirmala Sitharaman after the conclusion of the 41stt assembly of the GST Council right here on Thursday.
Once the states determine, the Centre would method the Reserve Bank of India, that may elevate the cash to make up for the shortfall in GST collections. The Centre might compensate the states by extending the interval for a refund of cess past the five-year-period that ends in 2022.
The Centre would convene one other assembly of the GST Council as soon as the states have determined their choices, and the RBI agrees to the Centre’s proposal.
As a results of a tanking financial system because of the “hand of God’’ which can result in a contraction, the compensation hole this yr is predicted to be Rs 2.35 lakh crores.
The shortfall in compensation because of the pandemic has been estimated to be Rs 97,000 crores below the primary choice and states going for this window, can borrow 0.5 per cent of their state GDP with out going by the conditionalities, that the Centre had earlier prescribed.
“Under the second option, the entire gap of this year could be met by the borrowing of states, and arrangements could be made with RBI”, mentioned Sitharaman, however with a situation that the states should perform reforms in energy tariff, and so on, to borrow.
Lashing out on the webinar of seven state CMs convened by Congress President Sonia Gandhi, Sitharaman, nevertheless, complimented the contributors on the GST Council for displaying statesmanship by specializing in the difficulty at hand.
“Sonia Ji, had mentioned non-payment of compensation is a betrayal of nation and states. At the GST council assembly at the moment, states didn’t bask in politics. Ministers and CMs behaved like statesmen whereas these outdoors who blocked compensation when the regulation was being drafted are actually indulging in politics,’’ she mentioned.
Finance Secretary Ajay Bhushan Pandey mentioned the Ministry had sought the Attorney General’s views, who had opined that GST compensation, needs to be paid for 5 years, and the compensation hole to be met from cess fund and never from the Consolidated Fund of India.
Finance Minister Smt. @nsitharaman chairing the 41st GST Council assembly by way of video conferencing in New Delhi at the moment. MOS Shri. @ianuragthakur, Finance Ministers of States & UTs and Senior officers from Union Government & States are additionally current within the assembly. pic.twitter.com/wt4ZBaMeW8
— Ministry of Finance (@FinMinIndia) August 27, 2020