‘No consensus on how to make up for GST shortfall’: FM Sitharaman

Mangalore Today News Network

New Delhi, Oct 12, 2020: Addressing the media after chairing the GST Council meeting on Monday, 12 October, Finance Minister Nirmala Sitharaman said there has was no consensus arrived at on the way to make up for GST shortfall of states.

 

"The states asked some specific clarifications, which were given. Many of the clarifications were on the attorney general’s opinion on borrowing, GST Council’s authority to extend cess collection beyond five years," Sitharaman was quoted as saying after the GST Council meeting

"“The collection of cess is inadequate for paying compensation. This is absolutely apparent for everyone to see and because it is something which was never envisaged, the shortfall will be now be met by borrowing.”" - Nirmala Sitharaman, as quoted by ANI.

12 States Accepted Centre’s Proposal, 9 Do Not

After Thursday’s meeting, while 12 states accepted the Centre’s proposal to borrow from the markets, nine others placed the onus of borrowing on the Government of India, with the finance minister seeking time to consider the latter’s demands, reported NDTV.

"States borrowing does not mean a chaotic situation. We will facilitate states so that some states end up paying high-interest rates while others obtain loans at a reasonable rate," Sitharaman further said during the briefing late on Monday.

The meeting – which saw the participation of Minister of State Anurag Thakur, along with the finance ministers of states and Union territories – was held to discuss the contentious issue of GST compensation.

This was the third time the council met to discuss the issue of funding the shortfall of Goods and Services Tax (GST) revenue of states.

In order to fill the gap, during a meeting in August, the Centre had given two options of borrowing to the states.

courtesy: Yahoo