GST Council meet yet again — to discuss compensation issue for the third time today
While some opposition ruled states are demanding that a
The single agenda 43rd meeting of the Council will discuss on the way forward, sources said.
AdvertisementIn its previous meeting last week, the Council had decided to extend the surcharge on taxes on luxury goods such as cars and tobacco products beyond June 2022, but failed to reach a consensus on ways to compensate states for loss of tax revenue.
The projected total compensation shortfall in current fiscal stands at Rs 2.35 lakh crore.
The Centre in August gave two options to the states to borrow either Rs 97,000 crore from a special window facilitated by the RBI or Rs 2.35 lakh crore from market and had also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing.
Following demand by some states, the amount of Rs 97,000 crore was increased to Rs 1.10 lakh crore.
As many as 21 states -- which are BJP ruled or have supported it on various issues -- have opted to borrow Rs 1.10 lakh crore to meet the compensation shortfall.
The Centre has released Rs 20,000 crore to the states towards compensation shortfall so far in the current fiscal.
AdvertisementUnder the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs.
On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods, and the proceeds from the same are used to compensate states for any revenue loss. JD ANZ RVK
Popular on BI
- DBS Bank’s custom financing leads the way for companies trying to reach net-zero goals
- Republic Day 2022 – Here is a list of wishes and messages you can send to your fellow citizens
- The world's 5 richest tech tycoons — including Elon Musk, Jeff Bezos, and Bill Gates — have already lost about $85 billion this year amid a brutal market sell-off
- Best 14-inch laptops in India
- Best 55-inch smart TVs with Chromecast built-in
- Best 2.1 channel speakers with Bluetooth support
- OPINION: Experts’ guide to understanding the role of DeFi in digital finance
- OpenSea is returning the millions users lost due to a bug