Goods and Services Tax (GST) collection has been severely impacted due to coronavirus pandemic this year, says Revenue Secretary after GST Council meeting on Thursday. The Finance Minister Nirmala Sitharaman held 41st Goods and Services Tax (GST) Council meeting yesterday. The states were guaranteed payment for any loss of revenue in the first five years of GST implementation from July 1, 2017. However, due to the Covid-19 outbreak, two options of compensating states were discussed, including borrowing from the Reserve Bank of India (RBI). Compensation gap which has arisen this year (expected to be Rs 2.35 lakh crore). Shortfall in compensation due to implementation of GST has been estimated to be Rs 97,000 crore.
First option offered by the council is to provide a special window to states, in consultation with RBI to provide the Rs 97,000 crore at a reasonable rate of interest, this money can then be repaid after 5 years from collection of cess. Second option is that entire GST compensation gap of Rs 2,35,000 crore of this year can be met by the states. States have requested a 7-day window to think over.
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