business & economics

Will Pay GST Compensation But States Must Borrow: Centre

BP World Bureau | Sep 09 2020
Image credits: Twitter

NEW DELHI: Union Finance Ministry official said that the entire compensation sum on account of shortfall in collections of Goods and Services Tax (GST) will be paid and assured that the entitlement of the states would always be for full compensation.

For the settlement of GST compensation, two options are given. Under the first option is provided to borrow by states and under a special dispensation from the RBI for a sum of about Rs 97,000 crore this year, shortfall calculated by the Centre direct account of GST.

Under option two, states are permitted to borrow from the market the entire expected GST compensation shortfall of about Rs 2,35,000 crore in FY21.