Rajasthan Govt Picks GST Borrowing Option Suggested by FM

The union finance ministry on Thursday announces that the present government congress who rules Rajasthan became the 25th member of the Goods and service tax (GST) administration to admit Rs 1.1 lakh crore through all members so as to fill the gap built during the lockdown in 2020-21 as given by the centre.

From the finance ministry, a person reveals “Rajasthan has also opted for the special borrowing window under Option-1 on the issue of meeting the GST compensation cess shortfall. The payment of the back-to-back loan to Rajasthan will be made available soon,”

As per the finance ministry, the Union Territory of Puducherry has also accepted Rs 1.1 lakh crore as provided by the centre. He also states that recently a various number of states along with union territory have deducted to 6 Chhattisgarh, Jharkhand, Kerala, Punjab, Telangana, and West Bengal.

All states oblige the center to adopt the whole measured Rs 2.35 lakh crore revenue and remunerate it completely. On August 27 at the 41st GST Council Meeting Get all updates of the GST Council 41st Meeting regarding states’ compensation. The meeting was held via video conferencing with states’ finance ministers. read more, the center provided 2 choices to states to fill their revenue shortfall for Rs 2.35 lakh crore for the present fiscal year. After 2 days it reveals that in the 1st choice there is no payment or the interest that the states have to furnish if they take Rs 97,000 cr but this was further enhanced to Rs 1.1 lakh crore. So to compensate for the GST revenue crises as of execution problems. Although they would have to own substantial interest costs while they opt for the second option to borrow Rs Rs 2.35 lakh crore which consists of revenue crises because of the pandemic and the execution issues.

Prior to Rajasthan and Puducherry had signed the 1st option of borrowing and 2UTs and 21 states had gone with the obligation given by the centre. These are Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tamil Nadu, Tripura, Uttarakhand, Uttar Pradesh, Jammu and Kashmir (UT), Andhra Pradesh, Assam, Arunachal Pradesh, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, and Delhi.

If to the 16 states and the 2 UTs Rs 6,000 crore is given on the first withdrawing as authorized at the interest rates at 5.19% and in the second withdrawing an amount of Rs 6,000 cr provided to the 16 states along with the union territories. With the interest rates of 4.42%.

“The loan amount in lieu of GST Compensation Cess releases has been passed on the back-to-back basis to the states, namely – Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, and UTs, namely – NCT of Delhi, Jammu, and Kashmir, and Puducherry, at the same interest rate, which is lower than the cost of borrowings for the States and UTs,”

The designated partner at consultancy MS Mani in Deloitte India specifies that the centre, as well as the states, have worked concurrently to find the distinction which is is the character of the GST administration.

“This development is a reaffirmation of the spirit of cooperative federalism demonstrated by the States and Centre since the introduction of GST Gather the basics of GST regime atmosphere in India. We illustrate how meaningful this is for businesses, consumers and Indian Government. read more. Considering the surge in GST collections for the past two months, it would now be even more reassuring to the States that they would be able to meet their revenue requirements.”