Center released 6th installment of 6,000 crores for GST compensation
The central government said on Wednesday that it’s released the 6th installment of Rs 6,000 crore to the states to catch up on the Goods and Services Tax (GST) revenue. With the discharge of this installment, a complete amount of Rs 36,000 crore has been released to the states thus far.
The Finance Ministry has given this information during a statement. The statement said that out of this amount of Rs 6,000 crore, 5,516.60 crore has been given to 23 states while Rs 483.40 crore has been given to those 3 union territories of Delhi, Jammu and Kashmir, and Puducherry. These three Union
Territories of the legislature are members of the GST Council.
The statement said that this amount was borrowed in the week at a rate of interest of 4.2089 percent. So far, a complete of Rs 36,000 crore has been borrowed by the central government under the special lending facility provided by the Federal Reserve Bank. This amount is taken at a mean rate of interest of 4.7106 percent. there’s no difference in revenue account thanks to GST implementation of the remaining 5 states of the country – Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim.
The central government is borrowing this amount on behalf of the states. thanks to the implementation of GST, the states are estimated to receive a meager Rs.1.10 lakh crore during the present fiscal year. to satisfy this shortfall, the central government is taking loans under special lending facilities to the states.
The statement said that aside from borrowing to satisfy the shortfall within the GST item, the govt of India has also allowed states to borrow additional amounts adequate to 0.5 percent of their gross state domestic product (GSDP). This permission has been given to the states that have chosen the primary option of the middle for GST compensation. Under this provision, thus far 28 states are allowed to borrow additional Rs 1,06,830 crore.
The interest on this amount borrowed is going to be paid from the cess received under GST. The cess to repay the debt are going to be recovered even after 5 years. After repayment of interest from cess, 50 percent of the remaining amount are going to be paid to pay the first debt of Rs 1.10 lakh crore of GST compensation and therefore the remaining 50 percent to repay the installment of the extra loan.
Arrangements are made to levy a cess to the states to catch up on the loss in revenue thanks to the implementation of GST. this technique was to stay for five years after the implementation of GST, but Coronavirus’s decision to continue the cess system even after 5 years during this year thanks to heavy pressure on the state of Mali thanks to additional debt, thanks to taking the additional loan. has been done. (Language)