Buoyancy in GST revenue achieved

New Delhi : Finance Minister Nirmala Sitharaman informed the Lok Sabha that a few states including Telangana have sought a five-year extension for the compensation paid to them for revenue shortfall due to GST implementation. As per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016, Parliament shall, by law, on the recommendation of the Goods and Services Tax (GST) Council, provide for compensation to the states for loss of revenue arising on account of implementation of the goods and services tax for a period of five years. When a nationwide GST subsumed 17 central and state levies from July 1, 2017, it was decided that states will be compensated for any loss of revenue from the new tax for five years. That timeframe has ended on June 30 this year. GST Council, in its 42nd meeting, has recommended extending the period of levy of GST Compensation cess beyond June 2022 to cover the entire shortfall as well as servicing the back-to-back loan released to states to meet their resource gap due to the short release of compensation, she said in a written reply to Lok Sabha. Centre borrowed Rs 1.1 lakh crore in 2020-21 and Rs 1.59 lakh crore in 2021-22 as back-to-back loans to meet part of the shortfall in cess collection, she said.