Dubbing COVID-19 an “act of God”, Finance Minister Nirmala Sitharaman said that it has impacted GST collections drastically. As per government estimates, the shortfall is to the tune of Rs 2.35 lakh crore for the fiscal 2021.
Addressing the media after GST Council meeting, Sitharaman said, the coronavirus pandemic was “an act of God” and an unforeseen factor which impacted GST collections. “This year we are facing an extraordinary situation. We are facing an act of God where we may even see a contraction,” she said.
So far, Centre has released over Rs 1.65 lakh crore as GST compensation to states for fiscal 2020, including Rs 13,806 crore for March, while cess collected for GST compensation was only Rs 95,444 crore, Sitharaman said.
Today’s meeting of the GST Council came in the backdrop of high pitched protests by states which have been seeking compensation for revenue shortfall amid the raging pandemic. Punjab, for instance, has said it may see a revenue deficit of Rs 25,000 crore this year.
In keeping with the demand from states, the GST Council placed two options before them. “Two options were placed before the states. We can facilitate through RBI. States have asked to put us both the options in a detailed form today and give them seven working days, after that they will come back. It means we can have a small meeting on GST. We will take a call. Two bi-monthly payments are delayed this year. We want only for this year. GST Council can look into the payments again in April next year,” Sitharaman said.
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