Not Reneging from GST Payment Responsibility: Sitharaman Tells LS

FM Sitharaman assured the Lok Sabha that the Centre will not increase taxes to make up for the lost revenue.

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Finance Minister Nirmala Sitharaman, on Friday, 18 September, said that she was open to options to compensate states on the shortfall in the Goods and Services Tax (GST) compensation cess, amid the opposition’s charge that the Centre was going back on its promise.

“Even if we are in an act of God situation, but we will discuss in the Council how to give compensation to the states... The Council will take a call on how to borrow to meet the (revenue) gap,” according to PTI.

The finance minister added that the government will not increase taxes on states to make up for the revenue losses incurred during the pandemic.


The states are facing a shortfall of Rs 2.35 lakh crore in GST revenue this fiscal year. In August, the Centre gave the states two options to either borrow Rs 97,000 crore from a special window facilitated by the RBI, or Rs 2.35 lakh crore from the market, along with the extension of compensation cess levied on luxury, demerit and sin goods beyond 2022 to pay back the borrowed sum.

Sitharaman accused the Opposition of trying to twist her “Act of God” remark and said, “It is an irresponsible comment towards a responsible government, led by Prime Minister Narendra Modi.”

Taxation Bill Introduced

A Taxation Bill, which seeks relaxation and changes in provisions of certain Acts, was also introduced in the Lok Sabha on Friday, 18 September.

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020, seeks replacement of the Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which was promulgated on 31 March this year.

The Bill further seeks to amend the Income-Tax Act, 1961, the Central Goods and Services Tax Act, 2017, the Finance Act, 2019, the Direct Tax Vivad se Vishwas Act, 2020, and the Finance Act, 2020, which are administered by the Department of Revenue through two boards, namely, the Central Board of Direct Taxes and the Central Board of Indirect Taxes. Thus, no additional expenditure is contemplated on the enactment of the Bill.

The Finance Act, 2020, is also proposed to be amended to clarify regarding capping of the surcharge at 15 per cent on dividend income of the Foreign Portfolio Investor.


The House had to witness four adjournments as Union Minister of State Anurag Thakur passed remarks against the PM National Relief Fund set up by India's first Prime Minister Jawaharlal Nehru in 1948.

(With inputs from IANS.)

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