GST Council rules out hike in taxes amid COVID-19 as Centre places 2 options to states

In 41st GST council meet, Finance Minister Nirmala Sitharaman, on Thursday, ruled out an increase in GST rates, saying 'this is t appropriate time' as country battles COVID-19 and its ecomic consequences. With several states complaining of n-payment of state dues by Centre, Centre has placed two options for borrowing by states to meet shortfall in GST revenues, pegged at Rs 2.35 lakh crore in current fiscal. Sitharaman has stated that ecomy is facing an extraordinary 'Act of God' situation, which may result in ecomic contraction. 

Coronavirus LIVE Updates: India's tally crosses 33-lakh; tests for TB patients mandatory

FM: ' hiking of GST'
 

Centre places before states 2 options for borrowing to meet GST revenue shortfall

Centre places 2 options before states

Centre has calculated compensation requirement by states in current fiscal would be Rs 3 lakh crore, of which Rs 65,000 crore is expected to be met from cess levied in GST regime. Revenue Secretary Ajay Bhushan Pandey said of this, Rs 97,000 crore is on account of GST shortfall, while rest is due to impact of COVID-19 on ecomy. Centre has reportedly refused to pay mandatory GST compensation of 14% for current year due to COVID-19 pandemic.

• To alleviate state's GST stress, Revenue Secretary Ajay Bhushan Pandey said a special window can be provided to states at a reasonable interest rate for borrowing of Rs 97,000 crore - amount can be repaid after five years (of GST implementation) ending 2022 from cess collection.
• second option before states is to borrow entire Rs 2.35 lakh crore shortfall under special window. "States have been given seven days' time to think over proposal," Pandey said.

Seven n-NDA CMs vow to unitedly take on Centre over GST

7 state CMs band toger over GST issues

On Wednesday, chief ministers of even n-NDA ruled states vowed to put up a united fight over issue of n-payment of GST compensation to states by Centre and to protect federal structure. At a meeting called by Congress president Sonia Gandhi, chief ministers of Maharashtra, Jharkhand, Punjab, Rajasthan, Chhattisgarh and Puducherry and West Bengal called for joint action on GST issue and decided to collectively petition prime minister at earliest. All chief ministers rallied behind Sonia Gandhi and accused Centre of squeezing ir funds in COVID times - with Thackeray saying, "We should decide wher we have to fight or fear". 

GST Council meeting debates revenue shortfall of states

"This refusal to compensate states is thing short of betrayal by Modi government and a betrayal of trust of people of India," said Gandhi while commenting on Centre's refusal to pay state GST dues. While Mamata alleged that her government is yet to get Rs 53,000 crore from union government, Punjab CM agreed with Banerjee reiterating that Centre had t paid states' GST dues and it was necessary to meet PM on this.