GST compensation cess to stay beyond June 2022 to help states

While the Centre had assured to compensate states in case GST collections did not grow 14% annually, the compensation requirement has shot up to an estimated Rs 3 lakh crore this year due to Covid-19. With a projected deficit of Rs 2.3 lakh crore, the Centre has come up with two options, involving market borrowings, to bridge the gap with repayment funded through the compensation cess.