Guwahati: After the GST collection was severely impacted due to the ongoing COVID-19 pandemic in the country, Union finance minister Nirmala Sitharaman during the 41st GST council meeting said that there was around Rs 2.35 lakh crore shortfall in FY21.
Following the five-hour-long meeting, Sitharaman discussed on two options to compensate the states in India.
“Compensation gap which has arisen this year (expected to be Rs 2.35 lakh crore). This shortfall is due to Covid-19 as well. Shortfall in compensation due to implementation of GST has been estimated to be Rs 97,000 crore,” said Sitharaman.
During the discussion, Sitharaman presented the GST council on providing a special windows to the states where an amount of Rs 97,000 crore would be disbursed at a reasonable interest rate after consultation with RBI.
“This money can then be repaid after 5 years from collection of cess,” said Revenue secretary Ajay Bhushan Pandey during the discussion. The other option proposed during the discussion was to meet the entire GST compensation gap of Rs 2.35 lakh crore of FY21 by the states in consultation with RBI.
As per reports, compensation of GST to states are pending for the months of April, May, June and July for this financial year.
As per the GST law, all the states of the country are guaranteed to be compensated twice a month for any loss of revenue for the first five years of implementation of GST from july 1, 2017.