GST Council meet: Govt to borrow Rs 1.58 trn for compensation shortfall

The Centre on Friday proposed market borrowing to the tune of Rs 1.58 trillion to compensate states for the goods and services tax shortfall through back-to-back loans, like last year. But several states expressed discontent, calling it “gross underestimation” of projected revenue losses.

States’ demand for the extension of the compensation period beyond June 2022 will be taken up in a separate meeting.

The Centre has pegged the GST compensation requirement at Rs 2.7 trillion for FY22, of which Rs 1.1 trillion is expected to be met through cess collection. Like last year, revenue growth of 7 per cent has been assumed