Odisha will receive Rs 496.21 crore towards compensation for loss of revenue for month of April and May, 2020 from the Union Government.
The Department of Revenue in the Union Ministry of Finance has informed State Government about release of compensation amount after Finance Minister Niramala Sitharaman announced acceptance of GST Council recommendations in this regard.While the Government of India released Rs 20,000 crore as compensation to all the States on October 5, Odisha will get Rs 496, 21,19 000 on account of compensation for loss of GST for first two months of this fiscal.The Finance Minister has also informed that by next week Centre will also disburse Rs 25,000 crore towards Integrated GST for 2017-18 to those States that received less amount due to anomalies. Odisha will also receive its share towards Integrated GST as it received less earlier, officials said. Odisha was waiting for compensation of Rs 3,647.12 crore for at least four months-April, May, June and July.
The Goods and Services Tax (GST) revenue has slowed to a trickle on account of a slowing economy, Covid-19 pandemic and subsequent lockdowns.As a result, collections were not enough to meet committed 14 per cent annual increase in States’ GST revenue, as provided in constitutional amendment Accordingly, Government of India has offered two options to States for borrowing to compensate the GST shortfall. The Odisha Government has opted for ‘Option One’ offered by Union Government to compensate GST shortfall.Option One, says that the State chooses to borrow to cover shortfall in compensation arising only due to implementation of GST, and not factoring in impact of Covid-19.That cumulative amount is estimated by Centre at Rs 97,000 crore for all the States.
The State picking this option can borrow via a special window by RBI that will be coordinated by Union Ministry of Finance.The borrowing will be permitted over and above any other borrowing ceilings eligible under any other normal or special permission notified by Department of Expenditure.The Centre will endeavour to keep that cost of borrowing at or close to G-Sec yields and subsidize difference if any.