Rs 40,000 crore GST shortfall likely

The government is likely to face a shortfall of around Rs 40,000 crore in GST collections for 2019-20. The Union Government has estimated a collection of Rs 1 lakh crore cess on sin and luxury goods in 2019-20. In case the tax growth falls below 14% during the year, the government would have to loosen its purse & offer the compensation that the states are eligible for.

 In the first four months of the year, the Centre released RS 45,784 crore as the compensation to states. The states are also demanding for the extension of GST compensation, which was originally meant to be provided for up to 5 years till another 3 years. However, the government said that it expects growth to rebound and GST collections to grow in the coming years.