The 41st GST Council discussed solely on the issue of GST compensation cess in its 5-hour long meeting.

The GST collection has been severely impacted this year due to the pandemic. According to the GST Compensation Law, states need to be given compensation. 

Total expects gap in GST collections: Rs 3,00,000 crore.

Total expected collections: Rs 65,000 crore.

Total expected deficit: Rs 2,35,000 crore.

Out of Rs 3 lakh crore gap in GST collections, the impact due to GST implementation was calculated to Rs 97,000 crore and the remaining Rs 2.03 lakh crore could be considered as impact due to COVID-19: Rs 2.35 lakh crore.

The two options given to States:

1. Centre provides a special window through RBI to States for taking Rs 97,000 crore as debt.

2. The States can borrow themselves from RBI: Rs 2.35 lakh crores.

States given 7 days time to decide whether they will opt for this proposal. Another short council meet will happen in a few days.



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