BHUBANESWAR: The State government has demanded the Centre to extend the GST compensation scheme for five more years to support Odisha overcome the revenue lost due to implementation of GST and Covid-19 pandemic.
Odisha was among at least a dozen states, which sought extension of the compensation, during the 47th meeting of the GST Council held on Tuesday and Wednesday at Chandigarh. Pitching for the extension to compensate the states beyond June 30, Minister for Finance Niranjan Pujari said if the GST compensation is discontinued after June 2022, the resource gap in the State would increase and cause large fiscal shocks.
“The States have lost the due compensation in 2020-21 and 2021-22 for the pandemic. The discontinuance of the compensation would also lead to reduction in the Capital expenditure and cause contraction of the State economy,” he said requesting the Council to extend the compensation window by another five years in the interest of the State.
When GST was rolled out subsuming 17 central and state levies from July 1, 2017, states were promised compensation for revenue loss till June 2022.