After the crucial meeting of the GST Council, Finance Minister Nirmala Sitharaman said that the Act of God could result in a contraction of the economy, referring to the coronovirus epidemic. Finance Minister Nirmala Sitharaman says that in the 5-hour long GST Council meeting, two options for compensating the states were discussed. According to the assessment of the Center, the states will need Rs 3 lakh crore as compensation in the current financial year.
The AG was clearly of the view that the indemnity gap cannot be bridged by the Consolidated Fund of India. Option 1 was presented to the GST Council, which, in consultation with RBI, would provide a special window to the states to provide Rs 97000 crore at a reasonable rate. The Revenue Secretary said that the Goods and Services Tax (GST) collection has been badly affected due to the Kovid-19 epidemic.
The Finance Minister said that the options discussed to meet the GST deficit are for the current fiscal year only. The GST Council will revisit the issue in April next year. Anurag Thakur, Minister of State for Finance (MoS), Finance Ministers of various states and Union Territories (UT) and senior officials of Central Government and States were present in the meeting. After a 5-hour long meeting, the GST Council held a video press conference with the media.
Finance Secretary informed, “The Central Government released more than Rs 1.65 lakh crore as GST compensation for the financial year 2019-20, including Rs 13,806 crore for March. The total amount of compensation released for 2019-20 1.65 lakh crore, while the cess amounted to 95,444 crore. ” The Attorney-General stated that a transition period for GST compensation is to be paid from July 2017 to June 2022. On GST, Finance Secretary Ajay Bhushan Pandey said that the revenue will have to preserve the compensation gap from the cess fund, which will be charged by levying cess.