Several states have seeked for extension of goods and services tax compensation to the states for two years beyond 2022 to breakthrough over the countering effect they may face in the post-Covid-19 scenario.
State finance ministers, during a video conference on Monday, also discussed issues arising out of the lockdown, including the urgent requirement of some form of aid for micro, small and medium enterprises, which have been affected the most, besides relief for the services sectors.
Punjab finance minister Manpreet Badal, during the meeting said “GST compensation, which is due to the states, should be given… the GST Council could also borrow and let the compensation continue for a year or two after 2022 also, which can be collected later,”.
He also added that while this issue was to be raised at a separate GST Council meeting, it could not be done due to the lockdown.
Kerala has already said it is undergoing a financial crisis and reuires additional funds from the Centre to get breakthrough over COVID 19.
The Central Government had recently transferred Rs 14,103 crore as pending GST Compensation to the states for the month of November 2019 and October 2019 which sums up the total to Rs. 34053 crore for the same.
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