Punjab wrote to the Centre demanding the formation of a GoM to resolve the issue, with Kerala and Chhattisgarh backing the demand.
The Goods and Services Tax (GST) council might consider setting up a group of ministers (G0M) to resolve the states' issues on the compensation cess.
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The Centre has also offered a third option to the states in addition to the two options: states bear the borrowing burden jointly with the central government rather than taking the entire responsibility.
The states had previously rejected the two options suggested by the Centre.
Following the third proposal, Punjab wrote to the Centre demanding the formation of a GoM to resolve the issue, with Kerala and Chhattisgarh backing the demand.
Kerala finance minister Thomas Isaac said, "We could resolve the issue of compensation cess within a GoM as we have done in the past." He further added that the council could also discuss the third option that the Centre is offering.
"Centre would further deliberate on and conclude this debate on borrowings on October 12, and opposition won't make it easy. However, some ministers from a couple of opposition states are considering the Centre's proposal."
The GST council will meet at 11:00 am via video conferencing and will iron out the issues to deal with the shortfall of funds in this case. The October 12 meeting would be considered a continuation of the 42nd council meet.
(Edited by : Jomy)
First Published: IST