The dispute between the central government and the states over the GST compensation is not being named. Sources have told Hindustan that even though the states are talking about borrowing this money from the Center in the meeting of the GST Council, in reality the matter is not within the jurisdiction of the Council.
According to the officer associated with the case, the GST Council has the right only to meet the deficit of compensation by cessing the products. In the case of borrowing, the state and central government have to take initiative on their own. The central government has also decided to extend the period of compensation cess. In such a situation, the ball is now in the court of states that they are ready to either borrow through the central government’s RBI and repay that amount through the compensation cess collected after 2022 or find a new way. This is the reason why the central government suggested two borrowing options on its behalf, states were given the option of borrowing from the Reserve Bank. Out of this, 21 states have also agreed to borrow 1.10 lakh crore rupees as the first option. In view of the opposition of other states in the council meeting held on Monday, the final decision on this has been postponed till October 12.
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