Replying to a question in the Rajya Sabha, Anurag Thakur said that the AG had left the final decision up to the Centre, as per the authority given under Article 293(3) of the Constitution.
Attorney General (AG) KK Venugopal was of the view that the Goods and Services Tax (GST) Council could ask the Centre to let states borrow to compensate for the shortfall.
Minister of State (Mos) for Finance Anurag Thakur said on September 15 the AG's opinion had been taken on pending payment of GST compensation to states due to shortage of compensation cess collection.
Replying to a question in the Rajya Sabha, he added that the AG had left the final decision up to the Centre, as per authority given under Article 293(3) of the Constitution.
"The GST Council can, in the exercise of its duties under article 279A(4)(h) of the Constitution, recommend to the Central Government to permit the States to borrow money, as a measure for meeting the compensation gap," Thakur said in the reply.
The AG also said the GST Council could extend levy and collection of cess beyond the transition period of five years.The Centre, on August 27, gave two options to states - to borrow either the GST shortfall of Rs 97,000 crore from a special window facilitated by the RBI or the entire shortfall of Rs 2.35 lakh crore through the market.