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Revenue shortfall: Hold GST Council meet quickly, Mitra to Sitharaman

Under a novel association in FY21, the Centre borrowed Rs 1.1 lakh crore and transferred the quantity to states to satisfy the shortfall in GST compensation cess.

Amit Mitra, who’s in command of the West Bengal finance division, has urged the Union finance minister Nirmala Sitharaman to urgently name a gathering of the GST Council to debate a probable rise in states’ GST compensation want owing to the savage second Covid wave.

“As per the Gol projection, the shortfall was expected to be to the tune of Rs 1,56,164 crore in 2021-22, without taking into consideration the impact of Covid Wave-2. Now, due to Covid Wave-2 and lockdowns, the compensation will be much higher than what was projected earlier. This is undoubtedly deeply distressing,” Mitra wrote to Sitharaman. Under a novel association in FY21, the Centre borrowed Rs 1.1 lakh crore and transferred the quantity to states to satisfy the shortfall in GST compensation cess.

While Mitra expressed apprehension in regards to the rise in shortfall, GST collections in April touched a file excessive of over Rs 1.41 lakh crore. The GST revenues of April 2021 had been 14% increased than Rs 1.23 lakh crore collected in March.

The final GST Council assembly was in October 2020. Mitra wrote: “May I draw your kind attention to para 6 of the ‘Procedure and Conduct of Business Regulations of the Goods and Services Taxes Council’ which provides that the ‘Council shall meet at least once in every quarter of the financial year’. You would agree that not meeting every quarter to discuss vital issues is not in line with the very principle of cooperative federalism.”

While Mitra expressed apprehension about rise in shortfall of GST compensation cess, GST collections in April touched a file excessive of over Rs 1.41 lakh crore. The GST revenues of April 2021 had been 14% increased than Rs 1.23 lakh crore collected in March.

“GST revenues have not only crossed the Rs 1-lakh-crore mark successively for the last seven months but have also shown a steady increase. These are clear indicators of sustained economic recovery during this period. Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue,” the finance ministry had mentioned.

“Despite the second wave of Covid-19 pandemic affecting several parts of the country, Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month,” the ministry had added.

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