The state got a loan of 600 crores from the middle
During the coronary period, the Central Government has given an exemption to Himachal Pradesh to require a loan of Rs.1717 crore in lieu of products and Services Tax (GST) compensation. Under this, the government has received Rs 600 crore. The remaining amount is going to be deposited within the government treasury in installments. The large advantage of this compensation amount for the government is that there’ll be no worry of interest and repayment of the loan. The central government will repay the loan.
This time the state has received Rs 1877 crore as GST compensation as compared to the year 2019. The GST has remained the sole source of income for the government since the central government brought all taxes under one roof. Additionally, the govt can raise income by levying VAT on petro-products. The state has a complete exemption to tax the sale of liquor, but it’s also important to stay in mind a budget liquor and petrol and diesel within the neighboring states. If not, twenty-five thousand trucks carrying cement will fill diesel from outside the state. Similarly, the sale of illicit liquor also damages the treasury of the govt. In old hydropower projects, 12 percent free power was a serious source of income for the state, but over time hydropower projects from solar and solar power sources didn’t earn enough.
state GST compensation
Additional Chief Secretary Finance and Planning, Prabodh Saxena says that the present fiscal year will pass. subsequent financial year goes to be tougher thanks to Corona. just in case of reduced tax aggregation in GST, the share of the states also will be limited.
Corona shakes economy
After the Corona crisis, the state’s economy has suffered a setback. During the present fiscal year, there was a loss of 23 percent within the half-moon. Revenue receipts improved within the second quarter. The state’s own means of income are limited to 10 thousand crores. the govt is unable to boost more income within the current situation.
There will be no gap funding after July 2022
Big states still question the financial help of small and economically weak states. In such a situation, the economy of the state will need to undergo an unprecedented crisis after July 2022. The central government will compensate the states for the economic loss in lieu of GST by June 2022. States will then need to stand on their own feet. After the implementation of GST, for five years, the central government had decided to try to gap funding of the states.