Centre Distributes Rs 6,000 Crore To States as GST Compensation

Centre Distributes Rs 6,000 Crore To States as GST Compensation The Union Finance Ministry announced on Friday that the 13th weekly instalment of Rs 6,000 crore has been distributed to 23 states and three Union Territories (UTs) to cover the GST compensation deficiency. A total of Rs 5,516.60 crore has been distributed to the 23 states, while a total of Rs 483.40 crore has been released to the three Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir, and Puducherry) that are members of the GST Council. The remaining five states, Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim, do not have a revenue deficit as a result of GST implementation, according to a statement from the Finance Ministry. So far, 70% of the entire estimated Goods and Services Tax (GST) compensation shortfall has been distributed to states and union territories having Legislative Assembly. According to the ministry, an amount of Rs 71,099.56 crore has been released to the states, while an amount of Rs 6,900.44 crore has been released to the three UTs having Legislative Assembly. In October 2020, the Government of India established a special borrowing window to offset a projected revenue shortfall of Rs 1.10 lakh crore due to the introduction of GST. The borrowings are made by the Government of India on behalf of the states and union territories through this channel. So far, 13 rounds of borrowing have been performed, beginning on October 23rd, 2020. " This week's payment was the 13th instalment of such cash made available to states. This week, the money was borrowed at a 5.3083 percent interest rate. So far, the Central Government has borrowed Rs 78,000 crore under the special borrowing window at an average interest rate of 4.7491 percent "According to the Finance Ministry. In addition to providing funds through the special borrowing window to meet the revenue shortfall caused by GST implementation, the Government of India has granted additional borrowing permission equivalent to 0.50 percent of Gross State Domestic Product (GSDP) to states opting for Option-I to meet the GST compensation shortfall in order to assist them in mobilising additional financial resources. Option-I has been chosen as the preferred option by all states. Under this clause, 28 states have been granted permission to borrow the entire additional amount of Rs 1,06,830 crore (0.50 percent of GSDP).