Puducherry Accepted Centre Tax Compensation Offer for GST Collection

Puducherry has accepted the proposal of the center to borrow Rs 1.1 trillion to bridge the shortfall for goods and service tax (GST) collection INR 1 trillion GST has been collected for the very first time in the eight months in October post unlocking from September. Any month GST collection resembles the business received in the previous month. It has also been revealed when the center has declared the installment on the payment on Monday.

The finance ministry has withdrawn and transferred the 2nd installment for Rs 6,000 cr to 16 states to three union territories beneath the alongside borrowing window. The loans taken by the center have been initiated back to back. Although the 7 states such as Kerala, West Bengal, Punjab, and Jharkhand have still not welcomed the obligation, and thus, not received the taken amount.

The state will not accept the proposal indeed they obliged the center to pick up the entire sum, said Puducherry Chief Minister V Narayanasamy to Business Standard. On the other side, 21 states and 3 UTs have taken the obligation out of 5 states Manipur, Nagaland, Mizoram, Arunachal Pradesh, and Sikkim does not face any shortfall.

“This amount was raised at a weighted average yield of 4.42 percent. It will be passed on to the states/UTs at the same interest rate, which is lower than the cost of borrowings for the states and UTs,” said the council. Alongside the finance ministry have also reimbursed a loan of Rs 12000 crore.

Loans have been discharged to, Goa, Puducherry, Jammu and Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Andhra Pradesh, Assam, Bihar, Uttar Pradesh, Uttarakhand, Delhi, Gujarat, Haryana, and Himachal Pradesh. Kerala Finance Minister TM Thomas Isaac has proclaimed to conduct the option i.e (borrowing Rs 1.1 trillion) without asking the GST officials that it is illegal to increase the consideration of payment beyond 5 years.

“The Council has only extended the cess collection period beyond 2022 and has not said that it will compensate states for the rest of the shortfall beyond Rs 1.1 trillion. The GST Council meeting Get to know about GST (Goods and Services Tax) council 1st to 42th meeting updates and decisions taken by members. We have covered 1st meeting to last meeting decisions should be convened and search for a consensus,”

Finance Minister Nirmala Sitharaman was obliged by the Kerala Chief Minister Pinarayi Vijayan to uphold the scenario and increase the limit beneath the special window facility of Rs 1.83 trillion. Whereas the proposal has been rejected by the state Jharkhand.

The center will continue to convenience the 7 states and will convenience them. “They’re welcome to join any time,” said finance secretary Ajay Bhushan to the Business Standard.

The GST shortfall is proposed to have an effective collection as seen in September and October reaching Rs 1.05 trillion, a 10 %rise year-on-year.