New Delhi – On Thursday, the 41st meeting of the GST Council was led by Union Finance Minister, Nirmala Sitharaman. In the meeting, they discussed the decrease in GST compensation and borrowing funds to return the GST. At the time, states have been given two options and a span of seven days to respond to it. The rate of compensation has decreased immensely due to the Covid pandemic. This year, the GST deficit is estimated to be around Rs 2,35,000 crores.
The lockdown that was declared because of the Covid pandemic has hit the economy vigorously. This has reduced the compensation and has affected the returns being given to the states. The states demanded a GST refund from the Union Government. Hence, this matter was discussed in the meeting.
In July, Rs 87,422 crores and in June, 10,917 crores were retrieved from the GST. However, no state has been provided with its part of the GST in this fiscal year. In the meeting, the states have been given two options. First is, the union must borrow interest and pay for the states, or the states can loan it from the RBI. Moreover, the states have been asked to respond within seven days.
Earlier, on Monday, some important decisions were taken in the GST council meeting. Taxes on essential products were deducted for the benefit of ordinary people. At the same time, the Union Finance Ministry informed that the amount of GST payers has escalated from 65 lakhs to 1.24 crores as the rate of GST has been reduced on various businesses and essential products.