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Centre, states stare at Rs 2-trillion GST cess gap amid Covid-19

The GST compensation of states is expected to widen to Rs 2.5-3 trillion in FY22 as against the cess collection of Rs 1 trillion estimated in the Budget

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Economists estimate that the cess collection may fall short by Rs 1.5-2 trillion viz a viz the compensation requirement, suggesting that the government may again need to borrow from the markets to fill the gap like last year | Illustration: Ajay Mohanty

Dilasha Seth New Delhi

4 min read Last Updated : May 24 2021 | 6:10 AM IST

With the government anticipating goods and services tax (GST) collection to fall below Rs 1 trillion in June -- the first time in nine months -- owing to Covid-led disruption, compensation to states is set to exceed cess collection for the second year in a row.

The GST compensation of states is expected to widen to Rs 2.5-3 trillion in FY22 as against the cess collection of Rs 1 trillion estimated in the Budget. It is higher than Rs 2.35 trillion compensation requirement estimated last year by the Centre for FY21.

Economists estimate that the cess collection may fall short by Rs

Topics : Goods and Services Tax Tax Collection Coronavirus Lockdown GST compensation Shortfall in GST Revenues GST collection Indian Economy Economic recovery GST Council

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