InvestorQ : What is the big agenda for the GST Council when it meets on 12 October, Monday?
Sam Eswaran made post

What is the big agenda for the GST Council when it meets on 12 October, Monday?

Answer
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Moii Chavate answered.
2 weeks ago


There is a special GST Council meeting that is scheduled on Monday, 12 October essentially for hammering out the GST revenue sharing formula with states. In the last meeting, the GST Council meeting had been stuck at that point and no progress was made.

The GST Council under Nirmala Sitharaman had then proposed either for the states to borrow Rs.97,000 crore with centre guarantee or the entire shortfall of Rs.235,000 crore from the open market. Non-BJP states had turned down that offer.

All the 10 non-BJP ruled states refused to accept the borrow-and-spend formula and insisted that centre transfers funds as committed by the centre. However, the BJP ruled states fell in line and in fact asked the centre for permission to go ahead and borrow.

The 10 non-BJP ruled states are unwilling to accept the government suggestion to borrow from the special window as it would worsen their fiscal deficit. They expect their fiscal deficit at state level to worsen by more than 150 bps due to this borrowing.

The last meeting agreed to transfer only Rs.20,000 crore out of the special cess to the states. It had failed to reach any consensus on how to compensate states for loss of tax revenue. Centre has to compensate states to the tune of Rs.235,000 crore.