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States to bear interest burden for borrowing Rs 2.35 trn shortfall in GST

Finance Ministry gives states two options for meeting shortfall in collection; GST Council meet to discuss matter

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States have not got even a rupee of compensation during the current financial year so far | Illustration: Ajay Mohanty

5 min read Last Updated : Aug 29 2020 | 8:41 PM IST

States will have to bear the interest burden if they decide to borrow the entire Rs 2.35 trillion shortfall estimated in goods and services tax (GST) revenue: that’s the second option proposed the central government has proposed to raise resources to compensate states amid inadequate cess collection.

The finance ministry, in a letter to states, Saturday shared the details of the two options, which states will examine over seven days. The GST Council, which met Thursday, will convene again after for discussions.

The centre gave states two options at the GST Council meeting for compensation: they can either borrow up

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