After a long disagreement by opposition ruled states over the issue of GST compensation cess, the centre has finally agreed to borrow over 1 lakh crore to encounter GST shortfall.
GST compensation issue, On 15th October 2020, the Centre announced the proposal of borrowing 1.1 lakh crore itself and pass it on to states as GST compensation. Earlier, proposal given by the Centre was rejected by the opposition ruled states.
Under the fresh announcement made by Finance Minister Nirmala Sitharaman, the Central government will borrow the estimated shortfall of Rs 1.1 lakh crore in lieu of GST compensation cess release and the same will be lent to the states under a special window.
Here is the official press release: Special Window to States for meeting the GST Compensation Cess shortfall