Meghalaya, Assam, Tripura to receive GST compensation levy

Finance Ministry under a special borrowing window will give GST compensation cess shortfall to Assam, Meghalaya and Tripura.

As a second tranche the Centre on Monday released a sum of Rs 6,000 crore to the states as their GST compensation cess shortfall.

The Finance Ministry said in a statement, that the second tranche will be released to 16 states and two union territories.

The other states that have received GST compensation are Maharashtra, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, Andhra Pradesh, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh,.

The two Union Territories are Delhi and Jammu and Kashmir who will get the GST compensation cess shortfall.

According to the Finance Ministry, the borrowed amount will be transferred to the states as “back-to-back loan in lieu of GST compensation cess”.

The first tranche of Rs 6,000 crore was transferred to several states and union territories by the government to bridge the GST revenue shortfall, on October 23.

Under the special window programme, the Finance Ministry has facilitated a total loan of Rs 12,000 crore till date.

The facilities available to the states which choose Option-1 inter-alia include permission to borrow the final instalment of 0.5 per cent of GSDP out of the 2 per cent additional borrowings permitted by the government in view of the COVID pandemic, waiving the reforms condition.

The finance ministry stated earlier that the government will borrow Rs 1.1 lakh crore under the special window.

With Rs 1.1 lakh crore on account of GST shortfall the total shortfall in GST collection is estimated at Rs 2.35 lakh crore.