Borrowing by states for GST compensation to be cost inefficient: Punjab FM

Attorney General K K Venugopal has suggested that the Council can recommend to the Centre to allow states to borrow on the strength of future receipts from the compensation fund

Expressing ‘shock’ over the Centre’s stance on compensating states for goods and services tax (GST) shortfall, Punjab has pressed for market borrowing by the Centre to make up for the inadequate cess collection apart from operationalising the dispute resolution mechanism to settle the issue.  It has also recommended measures like widening the scope of compensation cess to cover more goods and services.
 

“The recent reports that the central government has informed the parliamentary panel that it has neither the money, nor the obligation to pay the GST compensation to states, has come as a complete shock,” said Punjab's finance minister