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The Goods and Services Tax (GST) Council meet on October 12 under the chairmanship of Finance Minister Nirmala Sitharaman to discuss the GST compensation for state governments for FY21.
However, the GST Council concluded the discussion without reaching any consensus for the second time in two weeks. The Centre and states had met on October 5, but could not reach a consensus on the issue of borrowing to make up for compensation shortfall
In August, the Centre had proposed two options to states, to either borrow Rs 97,000 crore (on account of GST implementation) through a special window facilitated by the RBI or to borrow the complete shortfall of ₹2.35 lakh crore (including ₹1.38 lakh crore due to COVID) from the market.
The amounts under the two options have since been revised to ₹1.10 lakh crore and ₹1.8 lakh crore, respectively.
The government said that 21 states were in favour of borrowing ₹97,000 crore to meet the GST revenue hit to state coffers.
Here are the key takeaways from the GST Council meet:
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