Finance Minister Nirmala Sitharaman on February 22 said that there is no adversarial relationship between the states and the Centre when it comes to matters of Goods and Services Tax (GST).
The finance minister, while addressing a press conference in Mumbai, said: "GST Council has itself decided that compensation cess will continue to be collected until March 2026. This will make up for the shortfall until now. This extension in GST compensation collection will also be used to pay interest on the borrowed money."
Sitharaman is in Mumbai on a two-day visit and has been meeting industry, trade and financial market stakeholders since February 21. The discussions were held over the recently passed Union Budget for the financial year 2022-2023
The finance minister's press conference comes at a time when the fragile situation in eastern Europe has sent jitters to markets across the world. The oil prices have sharply shot up, crossing $99 per barrel earlier in the day.
Speaking on matters of GST Compensation she stated that the cess will continue till March 2026 and all decisions regarding the same will be discussed in the GST Council.
The FM also reiterated schemes and measures that have been extended by the Centre to support the states in Capex spending. She spoke about how the Centre increased the 50-year interest-free loan to Rs 15,000 crore for the states within the 12 month period.
"And this year we have said the same thing- Rs 1 lakh crore for the states, for the next 50 years, interest-free," she added. The FM was referring to her budget speech on February 2 where she proposed under the PM Gati Shakti Master Plan, 50-year, interest-free loans of Rs 1 lakh crore to the states to help them attract investments in the financial year 2022-23.