A meeting of the GST Council will be held with regard to paying compensation to the states

Mumbai, Ta. 20 August 2020, Thursday

The Goods and Services Tax (GST) Council is meeting on August 9 amid the economic downturn caused by the Kovid-12 epidemic, with an in-depth discussion on providing compensation to the states.

The meeting was supposed to meet in July but was forced to postpone it as states were busy combating Corona's illness. The only discussion at the next meeting is to provide compensation to the states.

A decision will be taken to raise money from the market to address the issue of compensation and most states and the Center are in the mood to agree on this, a government official said.

The Center had last March sought the opinion of the Attorney General on whether the council could raise money from the market to compensate the states in view of the impact of the Corona on the revenue of the states and the Center through GST.

Following their vote, the states are now considering the option of raising money from the market, the official said.

The council has had a number of options to offset the shortfall in revenue through GST due to Corona, one of which is to make the GST rate workable and cover more goods. However, it is not being considered appropriate to raise GST rates in view of the current recession, so it is being considered to raise money from the market.

According to the GST Act, for five years after the implementation of GST, the Center has to pay a deficit to the states according to a certain calculation. However, due to Corona, there has been a significant decline in GST revenues from the Center and the states.