GST shortfall: Centre releases Rs 2,268 crore to J&K under special borrowing scheme
Srinagar: Centre has released Rs 2268 crores to Jammu and Kashmir government to cover the shortfall in the Goods and Service Tax (GST) collection due to the economic slump last year. The money has been released under the special borrowing scheme.
Due to the Covid lockdown, Jammu and Kashmir witnessed a heavy shortfall in GST collection. The problem had exacerbated because of economic slump caused post abrogation of Article 370.
To make up for the shortfall, the Ministry of Finance has lent Rs 2268 crores to the J&K government.
A document assessed by The Kashmir Monitor reveals that the GST collection as well GST cess collection declined sharply in 2020-21 in the wake of COVID-19 pandemic.
“Such increase in the GST compensation requirement of States/ UTs for 2020-21 could not be met from the GST Compensation Fund due to inadequate amount available,” the document said.
The government had set up a special borrowing window in October last year to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through a window by the Centre on behalf of the States and UTs. Starting from October 23, 2020, the borrowings were completed in 20 weekly installments.
As per the document, J&K received Rs 6631 crore as GST compensation from the Centre till February this year. It said the provision GST compensation due for Financial Year 2020-21 is Rs 2751 crore.
An official from the finance department said the Jammu and Kashmir witnessed an improvement in GST collection post-October last year.
He, however, said the annual revenue collection has remained less due to which the state has decided to borrow from the Centre to make up for the shortfall.
“Jammu and Kashmir and a majority of the states in India opted to borrow money from the central government under a special window to cover the shortfall. We are expecting a further improvement in the GST revenue collection so that the borrowings will be paid back,” he said. As per the document, the central government so far has released ₹ 1,06,104 crores to 26 States/UTs as special borrowings.
Only five states of north-eastern India including Sikkim, Arunachal Pradesh, Mizoram, Nagaland, and Manipur have not opted for borrowings to cover the shortfall in GST. Maharashtra, as per the document, has been the highest borrower with Rs 11954 crore.