Arthanomics Vittarth

41ST GST COUNCIL AND COMPENSATION OF GST SHORTFALL TO STATES

This week’s #Arthanomics post is about the unfolding tussle between the Centre and the State on the #GST Compensation Fund Proposals.

Observing that Center and States are engaged in the tussle, it is imperative to analyse the dynamics of the ongoing issue, to know the consequences.

Since the beginning of GST, India has struggled year-on-year to increase GST #revenuegrowth by 14 percent, and has failed to fulfil the expectations and promises. Due to the #lockdown, the decline in #economic activities led to the lowering of the already sluggish #growth in GST revenue collection and the downturn in the collection of #compensation #cess by the Government.
This post explains GST’s compensation-based element, and past GST collection trends. It further enlists the implications of the #pandemic and decodes the proposals proposed by the Central Government at the 41st #GSTCouncil Meeting to negotiate state compensation for losses of revenues under the #indirect #tax system. We have also attempted to enlist the impacts of the proposals.

#Arthanomics #Vittarth #NIBM
Credits – Ananya Dwivedi, Harsh Singh and Kimaya Potdar

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