Entire GST compensation gap of Rs. 2,35,000 crore of this year can be met by states in consultation with RBI: FM Sitharaman

Finance Minister Nirmala Sitharaman today said entire GST compensation gap of Rs 2,35,000 crore of this year can be met by the states, in consultation with RBI.

After chairing the 41st GST council meet, she said, once the arrangement is agreed upon by GST Council, dues will be cleared fast and also take care of the rest of the financial year. Finance minister also said the other option given to provide a special window to states, in consultation with RBI, to provide the Rs 97,000 crore at a reasonable rate of interest, which can then be repaid after 5 years from the collection of cess.

She said the two options were placed before states so that each state does not have to struggle for loans. Ms Sitharaman said, states have requested to lay down both options in detail, and give them seven full working days to deliberate on it and get back. These options will be available only for this year. In April 2021, the Council will review and decide action for 5th year. Finance Secretary Ajay Bhushan Pandey has said, GST collection has been severely impacted due to COVID pandemic.