Special / स्पेशल

Centre may refuses to pay GST compensation to states, bad days in pipeline for Madhya Pradesh

Fund starved Madhya Pradesh along with other states are likely to face a major jolt on financial front as the Union Government may discontinue to pay GST compensation to states.


Centre in no position to pay GST compensation to states this FY due to Covid induced revenue shortfall, says Finance Secretary Ajay Pandey.  The Finance Secretary presented the case before Parliamentary Committee on Finance chaired by BJP MP Jayant Sinha.

He further said GST Act provides for change in "compensation formula" if revenue fell below a certain threshold level.Opposition MPs objected to it. But Sinha said FM NS & GST Council will ultimately arrive at a decision.

Recall that GST Act provides for compensation to the states every year ONLY
FOR 5 YEARS from the effective date , that is upto July 2022. now the million dollor question is what will happen thereafter?
Will states revolt? Will that be end of GST?