• Ahead of the 46th meeting of the GST Council, Finance Ministers of several States at a pre-Budget interaction with the Union Finance Minister demanded that the GST compensation scheme be extended beyond June 2022.
  • The adoption of GST was made possible by States ceding almost all their powers to impose local-level indirect taxes and agreeing to let the prevailing multiplicity of imposts be subsumed into the GST. This was agreed on the condition that revenue shortfalls arising from the transition to the new indirect taxes regime would be made good from a pooled GST Compensation Fund for a period of five years that is set to end in June 2022.
  • With the finances of most States having been severely hit in the wake of the pandemic, States have been hard pressed to find ways to garner the resources to meet the essential and additional spending necessitated by the public health crisis.