The Good and Service Tax council is aiming to meet on August 27 over the issue of compensation to the states under the chairmanship of Finance Minister Nirmala Sitaraman. The meeting will be virtual and members will assess the gaps between total GST Cess collection and the compensation cess yet to be paid to various states. The Council will also discuss the proposal regarding the amount to be borrowed from market to meet revenue shortfall.
The Objective of Council is to make assessment toward the revenue loss inccured by the states which will be borne by the Centre. Since FY16, states are previlaged to receive 14 per cent hike in revenue, though COVID-19 has badly hit the Centre’s revenue The Centre is of opinion that the states can be compensated for revenue shortfall from compensation cess only.
The GST collection for July stood at Rs 87,422 crore, lower that Rs 90,917 crore collected in the previous month. Of the Rs 87,422 crore, Rs 16,147 crore was collected as CGST and Rs 7,265 crore as compensation cess.
The revenue for the month were 86 per cent of the GST revenue in the same month of the pervios year. In July 2019, the government also settled Rs 23,320 crore to CGST and Rs 18,838 crore to SGST from IGST as regular settlement. The total revenue earned by the Centre and the states after regular settlement in July was Rs 39,467 crore for CGST and Rs 40,256 crore for SGST. Another meeting of the GST Council will be held on September 19.
