Finance Minister Nirmala Sitharaman on Monday that the Centre will tonight release Rs 20,000 crore that has been collected under the GST Compensation cess.
This comes as the crucial meeting of the GST Council failed to reach a consensus on ways to compensate states as the panel was split on political lines over using borrowing as a tool.
Addressing the media after the GST Council meetung, Sitharaman said the amount will get disbursed by tonight to all the state.
“This year till now, whatever has been collected under the Compensation cess which is approximately 20,000 crore will get disbursed by tonight to all the states,” she said.
The Ministry of Finance said in a press release that the Centre is releasing compensation of Rs 20,000 crore to states today towards loss of revenue during 2020-21 and an amount of about Rs 25,000 crore towards IGST of 2017-18 by next week.
The GST Council also receommended that the levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out, it said.
Briefing reporters after a marathon meeting of the panel, Sitharaman said 21 states had opted for one of the two options the Centre had previously suggested for borrowing to meet the shortfall in GST collections.
But some states did not opt for any of the two options, and the Council decided for more deliberations, she said, adding the panel will meet again on October 12.
She said the panel decided to extend using GST cess collections to compensate states beyond previously agreed June 2022 timeframe.
The panel besides easing compliance burden of small taxpayers also exempted satellite launch services by ISRO and Antrix, Finance Secretary Ajay Bhushan Pandey said.