States seek GST compensation beyond 2022

Opposition-ruled states including Punjab, Kerala and Delhi pitched for extension of goods and services tax compensation to the states for two years beyond 2022 to tide over the crunch they may face in the post-Covid-19 scenario.

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Key-Points

The State Ministers made this move due to the problems arising because of lockdown, including the urgent requirement of some form of aid for micro, small and medium enterprises (MSMEs), which have been affected the most, besides relief for the services sectors.

Some states are currently undergoing a financial crisis and have sought additional funds from the Centre.

The states also raised the issue of releasing GST compensation pending since December 2019.

The Centre recently paid Rs.34,053 crore in pending GST compensation cess for October and November, in two tranches, with the second tranche released in April 2020.