New Delhi: The GST compensation amount was discussed at a lengthy meeting of the GST Council today. Although the meeting lasted for eight hours, the issue of compensation was not resolved. The council will meet again on December 12 to resolve the issue. It was decided at the meeting that the cess collection would continue after 2022 to address the shortfall in revenue collection. The outline will be prepared in the coming days. Compensation of Rs 20,000 crore will be released to the states tonight for the 2020-21 financial year. It was decided at the meeting that another Rs 25,000 crore would be disbursed to the states within a week for the integrated GST (IGST) for the 2018-19 financial year.
Today, the 72nd meeting of the GS6 Council, chaired by Finance Minister Nirmala Sitharaman, was held via video conferencing. Rumors are rife that states will not be compensated. The government is not refusing to pay compensation to the states. There have been some changes to the two options given to the states. Option 1 has increased the amount to Rs 6,000 crore to Rs 1.10 lakh crore. Non-BJP-ruled states, however, have demanded the announcement of a third option. They demanded that a “dispute resolution” be set up within the council and that a vice president be appointed. According to the government, the states will have to pay Rs 3 lakh crore in compensation for the 2020-21 financial year. But a maximum of Rs 75,000 crore can be recovered through CES. There will be a direct shortfall of Rs 2.35 lakh crore. Of this, Rs 6,000 crore was estimated to be incurred due to the effects of Covid-18. A loan of Rs 4,000 crore was the first option, while a total loan of Rs 2.35 lakh crore was the second option. This was the second option offered by the Center. The first option was adopted by 21 states, while the second option was adopted by only one state.
