New Delhi, Sept. 4 -- Cash-strapped states could borrow from the Reserve Bank of India (RBI) to cover their shortfall in goods and services tax (GST) collection, with the federal indirect tax body, the GST Council, on Thursday, 27 August, agreeing that states' revenue losses needed to be compensated.
While the consensus in the Council was that states' revenue shortfall is to be met, the modalities for doing so witnessed clashes, with opposition-ruled states expressing disappointment about having to borrow from RBI rather than getting an upfront payment from the Centre.
To repay the borrowings, the cess levied on purchases of items such as cars, aerated drinks and tobacco will be extended beyond 2022, when the levy was supposed to expire, ...