15th FC: GST Compensation to States Could Reach INR 7 Lakh CR in 2022

The bridge between the collection of GST cess along with the revenue shortfall seen by the states to implement the goods and service tax can lie between anywhere from Rs 5 lakh crore to Rs 7 lakh crore as by June 2022 as from Rs 2.35 lakh crore expected for this year, the 15th finance commission Sessions are to be held by the Economic Advisory Council of the Fifteenth Finance Commission on April 23-24 2020 regarding the current position and the revival. Read more has studied to be seen in the report.

The report which was finalized in the statement obliging the framework to share the revenue amid the center as well as the states for the further 5 years on October 30 which provides the exceptional finance flowing path for every state in between the period of 2020-21 to 2025-26 from the different window for the states.

Due to Covid-19 lockdown The union finance minister Nirmala Sitharaman has finally taken some relief measures on the basis of currently widespread coronavirus pandemic. Read more based market uncertainties, to which the report is given to the President Ram Nath Kovind must lay on the variable growth forecasts for each of 5 years instead of finding the trend in constant growth.

The panel produces added significant terms of reference, which consists of the issue to develop an individual system for funding defence and internal security intended through the Centre, which shows insufficient Budgetary procurements for bigger capital outlays required to fulfill defence mobility.

“The Commission has examined and responded to the Defence Ministry’s proposal to set up a non-lapsable fund for security-related expenditure, whether it should be funded by a cess or a surcharge, and supplemented by monetisation of surplus defence land, issue of tax-free defence bonds and disinvestment of defence public sector units,”

GST Context

Except there is a constant surge in GST collections upon the following 20 months till June 2022 the council has forecasts that the

The considered dues might be assembled “between ₹5 lakh crore to ₹7 lakh crore” which shall be considered to fill the gap for the GST cess collections which is utilized to compensate to the states till the time their GST collection not raised in the next 20 months i.e June 22 declares by the official privy to the Commission’s assessment of States’ fiscal positions.

Hurdles of the Project

Contrary to the 14th finance commission which had assumed in which it is prescribed that the growth of GDP The biggest tax reform i.e. Goods and Services Tax is now a part of Indian Economy. A new and unified tax structure is followed for indirect taxation is 12.5% for the full 5-year cancel of its advice and furtherly an individual growth rate has been forecasted for every year. A GDP rise rate of 11% for 2020-21 has been stated by the department.

Compensation Based on Population

The population census of 1971 was taken in the previous finance commission which made a striking query this time when the panel took a 2011 consensus this time. When the panel was settling the dues of the southern state they have insisted suggested to take the total fertility ratio to compensate wisely.