The Goods and Services Tax (GST) Council will meet on August 27 under the chairmanship of Finance Minister Nirmala Sitharaman to discuss revenue compensation to states. The meeting will be held via video-conferencing and members will assess the gap between the total GST Cess collection and the compensation cess yet to be paid to various states. The council may also discuss a proposal to borrow from market to meet revenue shortfall.
The GST Council will finally make a decision on how much of the revenue loss incurred by the states will be borne by the Centre. Since FY16, states are entitled to get 14 per cent hike in revenue, though COVID-19 has badly hit the Centre's revenue. The Centre has been of the view that states can be compensated for revenue shortfall from compensation cess only.
The GST collection for July stood at Rs 87,422 crore, lower than Rs 90,917 crore collected in the previous month. Of the Rs 87,422 crore, Rs 16,147 crore was collected as CGST, Rs 21,418 crore as SGST, Rs 42,592 crore as IGST and Rs 7,265 crore as compensation cess.
The revenues for the month were 86 per cent of the GST revenues in the same month last year. In July 2019, the government's GST mop-up was Rs 1.02 lakh crore. The government also settled Rs 23,320 crore to CGST and Rs 18,838 crore to SGST from IGST as regular settlement. The total revenue earned by Centre and states after regular settlement in July was Rs 39,467 crore for CGST and Rs 40,256 crore for SGST. Another meeting of the GST Council will be held on September 19.