New Delhi, GST Council meeting to be held today is expected to be very ruckus. In this meeting, the central and state governments will be seen face to face with each other.
The GST Council meeting on Thursday is being held with only one agenda, which has become the biggest issue of confrontation between the central government and the state governments. The issue of compensation of the states will be the sole subject of discussion in this meeting to be held tomorrow.
Economic activity has been badly affected due to the lockdown caused by Corona. Due to this the GST collection of Central and State Governments has been very low.
The Central Government has not given compensation to the loss of GST collection of the states since April. Usually, this loss is replenished every 2 months by the central government to the state governments. In the last financial year i.e. 2019-20, the central government gave compensation of about 1.65 lakh crore rupees to the states.
The GST collection and the cess collection of the central government have come down sharply. The compensation cess from which the Central Government compensates the State Governments has been lower by 33 per cent between April and July from the previous year. The cess collection has been Rs 21940 crore between April-July this year.
State governments will try to pressure the central government to take loans from the market. Apart from this, the State Governments will also give suggestions on bringing more products under its purview for the purpose of increasing compensation.
At the same time, many state governments can also put pressure on the central government to increase the GST compensation cess from the present 5 years to 10 years.