Finance Minister Nirmala Sitharaman said that in order to compensate the GST revenue of the states, the central government will take the loan this year as well as last year and release it to the states.
Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman said that in order to compensate the GST revenue of the states, the central government will take the loan this year as well as last year and release it to the states. This year this amount will be Rs 1.58 lakh crore. Let us tell you that while implementing the GST system in July 2017, the system of levying cess on certain items was started for the states to compensate for the shortfall in their revenue for five years. The amount received from the cess is released to the states to compensate for their revenue.
There has been talk of adopting the old formula regarding GST Compensation Cess. It is estimated that for the reduction in compensation, the central government will have to take a separate loan of Rs 1.58 lakh crore. The Center will compensate the states’ share from the loan money.
A special session of the GST Council will be called
Regarding the cess system introduced at the time of implementation of the GST system, the Finance Minister said that a special session of the GST Council will be convened to consider the issue of keeping the cess system in force even after July 2022, in which only this issue will be discussed. There will be discussion. The 43rd meeting of the GST Council, chaired by the Finance Minister, was held on Friday through video conferencing. Finance ministers and representatives of all states and union territories were included in the council.
2.7 lakh crores needed in FY22
The GST compensation to the states is expected to decrease by Rs 2.7 lakh crore in the current financial year 2021-22. The Center expects that more than Rs 1.11 lakh crore will be received from the cess to be levied on luxury, harmful items. This amount will be given as compensation to compensate for the shortfall in the revenue of the states due to the implementation of GST.
17% increase in GST revenue projected
In the budget for the financial year 2021-22, the GST revenue was estimated to increase by 17 percent. In this sense, the monthly gross GST revenue works out to Rs 1.1 lakh crore. The shortfall in protected revenue and actual revenue in the period between February 2021 to January 2022, after release of compensation, will be close to Rs 1.6 lakh crore.
Let us inform that in the last financial year 2020-21, the Center had taken loan on behalf of the states to compensate for the shortfall in GST revenue and released Rs 1.10 lakh crore to them. Apart from this, Rs 68,700 crore was collected through cess.
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