GST Council to discuss compensation cess on Monday

As the GST compensation cess issue still remains unresolved with around 10 opposition-ruled states and Union Territories not agreeing with the Centre’s borrowing proposals, the GST Council, consisting of all state Finance Ministers and headed by the Union Finance Minister, will meet on Monday to discuss and try to reach to a consensus on the matter.

The last meeting of the Council a week back did not result in any consensus among the states as although around 20 states opted for the first among the two options offered by the Union Government, 10 states and Union Territories stayed put on their stand that they would not borrow in lieu of the compensation cess.

With the Covid-19 pandemic sharply reducing the revenue realisation of both the Centre and the states, the GST compensation needs of states have enlarged substantially beyond what is expected to be collected through compensation cess. This gap, however, needs to be filled and in this regard, the Centre offered the states two borrowing options to meet the shortfall in compensation cess collection this year.

The GST Council is yet to receive the unanimous support of the states for this proposal with about 10 opposition-ruled states and Union Territories wanting the options to be dropped and the Centre undertaking all borrowings to pay for the GST compensation shortfall to states.

Read More: https://www.bhaskarlive.in/gst-council-to-discuss-compensation-cess-on-monday/