Centre to release second tranche of GST compensation of Rs 6,000 cr

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New Delhi (NVI): In a bid to bridge the Goods and Services Tax (GST) revenue shortfall, Central government will release Rs 6,000 crore as the second tranche to 16 states and three union territories under a special borrowing window today, the Finance Ministry said.

“The Ministry of Finance, Government of India, under its Special Window to States for meeting the GST Compensation Cess shortfall, will be releasing an amount of ₹6000 crore as second tranche to 16 States and 3 Union Territories today,” the MoF said in a statement.

The 16 states and 3 UTs that will receive the funds are Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, UT of Delhi, UT of Jammu and Kashmir and UT of Puducherry.

“This amount was raised at a weighted average yield of 4.42 per cent,” the statement added.

It further said that this amount will be passed on to the States or UTs at the same interest rate, which is lower than the cost of borrowings for the States and UTs, thus benefitting them.

“Ministry of Finance has facilitated loans of Rs 12,000 crore till date under the Special Window to States/UTs,” it said.

Twenty one states and 3 union territories so far, have opted for the Special Window under Option 1. “The loans raised by government are released on a back-to-back basis to States/UTs, in lieu of GST Compensation Cess releases,” Finance Ministry stated.

Earlier on October 23, the Centre borrowed and transferred an amount of Rs 6,000 crore as the first tranche to 16 states and 2 union territories. The interest rate was fixed at 5.19 per cent.

-CHK