At GST Council meet on 5th Oct., non-BJP states to oppose Centre’s funding options

New Delhi: The GST Council assembly on Monday might flip right into a stormy affair, with non-BJP dominated states nonetheless being in disagreement with the Centre on the compensation subject.

Whereas as many as 21 states, principally dominated by BJP or events which have supported it on points, had until mid-September opted to borrow Rs 97,000 crore to satisfy the GST income shortfall within the present fiscal, opposition-led states like West Bengal, Punjab and Kerala haven’t but accepted the borrowing possibility given by the Centre.

Sources mentioned within the 42nd assembly of the Council on 5 October, opposition-ruled states would object to the Centre’s borrowing choices and demand different mechanism for funding GST compensation deficit.

They really feel that the constitutional legal responsibility of compensating states lies with the union authorities.

Within the present fiscal, the states are observing a staggering Rs 2.35 lakh crore Items and Providers Tax (GST) income shortfall.

Of this, as per Centre’s calculation, about Rs 97,000 crore is on account of GST implementation and relaxation Rs 1.38 lakh crore is the influence of COVID-19 on states’ revenues.

The Centre in August gave two choices to the states to borrow both Rs 97,000 crore from a particular window facilitated by the RBI or Rs 2.35 lakh crore from the market and has additionally proposed extending the compensation cess levied on luxurious, demerit and sin items past 2022 to repay the borrowing.

The non-BJP dominated states are at loggerheads with the Centre over the problem of funding the shortfall.