National

GST compensation formula gets nod from all states

NEW DELHI, DEC 6 (IANS) | Publish Date: 12/6/2020 12:38:10 PM IST

All the 28 states and three union territories with legislature have decided to go for the Centre-suggested compensation formula to meet the revenue shortfall arising out of the GST implementation.

Jharkhand, the only remaining state, has now communicated its acceptance of Option-1 given. Centre has set up a special borrowing window for the states who choose Option-1 to borrow the amount of shortfall arising out of GST implementation.

The window has been operationalised since October 23 and the Centre has already borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments and passed it on to the ones who chose Option-1. The next instalment (Rs 6,000 cr) will be released on December 7.

Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the states are also entitled to get unconditional permission to borrow the final instalment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the Centre under the Atma Nirbhar Abhiyaan on May 17.

This is over and above the Special Window of Rs.1.1 lakh crore.

On receipt of the choice of Option-1, the Centre has granted additional borrowing permission of Rs 1,765 crore to Jharkhand (0.50 per cent of the state’s GSDP).

 

-Tags:#GST

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