New Delhi: Union Finance Minister Nirmala Sitharaman said that the Centre will disburse Rs 20,000 crore compensation cess to states for revenue losses. Also Read - Dementia and Other Cognitive Disorders May Increase Risk Of Severe COVID-19
She made the announcement after the marathon meeting yesterday that failed to reach a consensus on the mode of repayment of the total compensation amounting to Rs 97,000 crore. It aims to end the deadlock between cash-strapped states and Centre over GST that has been going on for months. Also Read - How Taiwan Went Over 200 Days Without a Single Locally-Transmitted Covid-19 Case
Sitharaman had said that the compensation cess amounts to nearly Rs 20,000 for the whole year and it will be disbursed to all states on Monday night itself. The panel has also decided to extend compensation cess beyond June 2022. Also Read - India Records 48,648 Fresh Covid Cases, 563 Deaths; Tally Reaches 80.88 Lakh
The GST compensation, due to any state economy that progresses slower than 14 per cent, was necessitated this year due to the losses faced during COVID-19 lockdown. However, the Centre has thus far been unable to compensate.
The Finance Minister noted that 21 states had opted for one of the two options the Centre had previously suggested for borrowing to meet the shortfall in GST collections. However, other states remained undecided on the given options, forcing the Council to undergo more deliberations.
The panel besides easing compliance burden of small taxpayers also exempted satellite launch services by ISRO and Antrix, Finance Secretary Ajay Bhushan Pandey said.
The next panel meeting will be held on October 12.