Close on joining the bandwagon of other States and Union Territories to accept Option I put forward by the Union government for meeting the Goods and Service Tax (GST) compensation cess shortfall, Kerala has got ₹642.12 crore as the second instalment of the dues.
The ₹642.12 crore that has already reached the State exchequer has been taken as loan by the Union government through the Special Window of the Reserve Bank of India at an interest of 4.20 per cent.
In all, the Centre has taken ₹5,516.6 crore as loan from the RBI’s Special Window for all the States that have opted for Option I in the sixth instalment of clearing the GST compensation dues.
Kerala, which was in the forefront in the fight for getting the mounting GST compensation cess, missed out the first four instalments following the delay in joining the twin options mooted by the Centre. A sum of ₹328.2 crore was earlier received in the State as GST compensation dues from the Centre.
The amount of shortfall arising out of the GST implementation that has been pegged at ₹1.1 lakh crore is being made available through a special borrowing window put in place by the Centre. For 23 States and three Union Territories that went for Option I, the instalment was given in October and November.
The Centre has already granted additional borrowing permission of ₹4,522 crore to Kerala (0.5 per cent of Kerala’s GSDP), according to the Ministry. With these, Kerala will have a ‘NIL’ GST revenue shortfall.
Kerala had anticipated ₹9,006 crore as GST compensation till January 2021 as per the Centre’s decision to borrow through a special window and provide back to back loans to the States. For the State, reeling under severe financial crisis due to the pandemic induced lockdown, this will be a big relief.
Kerala was of the view and had been arguing that the total shortfall in the collection of GST estimated at ₹2.35 lakh crore should be provided this year itself.
