FM Nitin Patel’s remark after attending GST council meeting

Gandhinagar: Finance Minister Nitin Patel in his remark after GST council meeting over video conference said the one and only agenda in today’s meeting was compensation amount the states are required to be paid from the council.

Patel said Covid-19 situation had affected industries, service sector, trade and related losses of revenue to governments. GST act has provision to pay compensation to states. Gujarat has to receive Rs. 12,000 crore from GST council, while all states combined need to receive Rs. 3 lakh crore from council. Council till now paying such amount through cess on luxurious items deposited in the Centre. However that revenue has affected hugely. The Government of India has at the end of the meeting given two options on amount, time and method of paying compensation. The States opined that the government of India should take loan and give compensation to states from loan amount. Such loan and interest can be repaid in future from cess income. If this option is chosen, GST council can be given power to collect cess for longer period. The Government of India has made another suggestion which is regarding payment of compensation on account of slowdown but not on account of GST for now. The Government of India will send these two options to each state. The States will need to chose one of two options and send it to the Centre. GST council will take decision after this process.