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More misses than hits

GST Council should have addressed pressing issues

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GST Council | Goods and Services Tax | GST council meeting

Business Standard Editorial Comment  |  New Delhi 



The council that oversees (GST), the GST Council, met last Friday amid concern about state government finances during the second wave of the pandemic. The Union finance ministry proposed that, once again, the Union government borrow money on the market to make up the required compensation for states, given the shortfall of revenues. The amount proposed was Rs 1.6 trillion, alongside Rs 1.1 trillion to be collected as compensation cess. But, as states pointed out, the assumptions behind this number are questionable. For one, the forecast of revenue growth of 7 per cent may not be borne out, given the second wave. Some state finance ministers were also unhappy with the 7 per cent number, which was enforced amid the pandemic last year, arguing that it should not become a precedent and replace the legally mandated 14 per cent just because there are shortfalls.

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First Published: Sun, May 30 2021. 22:45 IST

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