INSUBCONTINENT EXCLUSIVE:
The Goods and Services Tax (GST) Council meeting on compensation for the states remained inconclusive on Monday, with 20-21 states opting
for the Reserve Bank of India (RBI) window of Rs 1.10 trillion (earlier it was Rs 97,000 crore) and around 10 states insisting the Centre
first option (the RBI window) and others wanting the Centre to borrow
Lots of discussion happened on that ..
Bihar Deputy Chief Minister Sushil Modi suggested that 3-4-5 days be given to the states to discuss the issue
said no state, irrespective of its choice, would be denied compensation.
In her answer to a question, she said she was not violating any
provision of the compensation law
window) and we have put it on record
compensation should be paid to the states during the current year as per clauses in the law and centre should borrow
compensation cess so far this year to the states tonight, Sitharaman said.
Sitharaman said borrowing for GST compensation would have no
bearing on the money that states raise, keeping themselves with the bounds of 5 per cent of state gross domestic product
paying the states compensation cess beyond June 2022 but the period of the extension is yet to be decided.
Sitharaman said the cess to be
collected after June 2022 would be first used for paying interest on borrowing
The remaining part will be divided into two, with half of it for paying back the principal of Rs 1.10 trillion, which is the compensation
gap arising out of the GST system, and the other half for paying the shortfall owing to Covid-related issues.
She said no state would pay
97,000 crore (now Rs 1.1 trillion) to be facilitated by the RBI and Rs 2.35 trillion of market borrowing.
The council decided to give Rs
25,000 crore of integrated GST to the states that received less than what they required in previous years
IGST of Rs 1.60 trillion was unallocated
Of that Rs 80,000 crore was distributed to states
But since there was no formula of allocating the fund, some states got more than their share and others received less
Those who got more will not have to return the money immediately.
The council also decided to give relief to companies whose turnover is
They will have to file quarterly returns from January against monthly returns now
Also, refunds will be given to only those whose bank accounts are validated by Aadhaar and the permanent account number.
The council also
decided to exempt from GST the Indian Space Research Organisation for launching satellites.TheIndianSubcontinent has always strived hard to
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First Published: Mon, October 05 2020
