Kerala CM puts away meeting to discuss approaching SC on GST after Sitharaman's initiative

In wake of the new initiative by Union Finance Minister Nirmala Sitharaman, Kerala Finance Minister Thomas Isaac on Saturday said that Chief Minister Pinarayi Vijayan has put away the scheduled high-level meeting to discuss approaching the Supreme Court on GST issue. Earlier, Isaac said that the state will approach the Supreme Court with all the nine states opposing Centre's two borrowing options for GST compensation if there is an issue. This statement from Isaac came after no consensus was achieved between the Centre and the various states on its two borrowing options.

However, the Centre on Thursday announced that it will borrow through the special window and provide back to back loans to states in lieu of compensation. Taking to Twitter, Isaac apprised about the development and further hoped that the Finance Minister will address the question of how much to borrow through dialogue with state FMs.

Thomas on Friday said that he welcomed the new announcement that Centre will borrow through special window and provide back to back loans to states in lieu of compensation.

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Centre To Borrow On Behalf Of States To Meet GST Shortfall

The Central government will borrow up to Rs 1.1 lakh crore on behalf of the states to bridge the shortfall in GST collections, the Finance Ministry said on Thursday.

A slowdown in the economy since last fiscal has resulted in a drop in the Goods and Services Tax (GST) collections, upsetting the budgets of states which had given up their right to levy local taxes such as sales tax or VAT when GST was introduced in July 2017.To make up for the shortfall, borrowing from the market was proposed.

In a statement, the Union Finance Ministry said states were offered a special window to borrow Rs 1.1 lakh crore over and above their existing limits, to bridge the shortfall.

READ: Centre to borrow on behalf of states to meet GST shortfall

READ: Kerala to move SC if there are any issues in GST compensation, says Thomas Isaac

(With Inputs from ANI)