21 States opt Rs 97,000 cr borrowing proposal to meet GST shortfall
   Date :21-Sep-2020

gst_1  H x W: 0
 
 
NEW DELHI ;
 
 
AS many as 21 States, mostly ruled by BJP or parties which have supported it on various issues, have opted to borrow Rs 97,000 crore to meet the GST revenue shortfall in the current fiscal, sources said on Sunday. The States and Union Territories (UTs) which have intimated their decision to the Centre are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.
 
Finance Ministry sources said Jharkhand, Kerala, Maharashtra, Delhi, Punjab, Rajasthan, Tamil Nadu, Telangana, and West Bengal are yet to respond to the GST Council proposal to decide their options. The States which do not submit their borrowing options before the due GST Council meet on October 5, 2020 will have to wait till June 2022 to get their compensation dues, subject to the condition that the GST Council extends the cess collection period beyond 2022, the sources said.
 
GST Council with full presence of States and UTs needs, as per the GST Act, only 20 States to pass any resolution, in case voting is required on any issue, the sources added. In the current fiscal, the States are staring at a staggering Rs 2.35 lakh crore Goods and Services Tax (GST) revenue shortfall. Of this, as per Centre’s calculation, shortfall of about Rs 97,000 crore is on account of GST implementation and rest Rs 1.38 lakh crore is due to the impact of COVID-19 on States’ revenues.
 
The Centre late last month 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 has also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing. The sources said few more States are also to intimate their borrowing option in a day or two. They added that Manipur, which had earlier opted to borrow Rs 2.35 lakh crore, later changed its preference to the Rs 97,000 crore option. The non-BJP ruled States are at loggerheads with the Centre over the issue of funding shortfall.