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New Delhi: The opposition's claim of solidarity with the goods and services tax (GST) compensation is seen to be hollow. 21 states have approved the centre's first option given by the Modi government, a loan of Rs 97,000 crore. The territories ruled by opposition parties have not yet accepted any proposal from the Centre. It may be noted that in the 41st meeting of the GST Council held this month, the Centre had placed two options before the states on compensation. The states were asked to give their opinion within a week, but not all the states have given their consent so far.

First option:-
As per the first option, states were told that they were losing nearly Rs 97,000 crore so far due to GST only. So, they should borrow this amount under a special facility in the Ministry of Finance. Under this, they will get the amount every two months as compensation.

Second option:-
The second option is that the states borrow the entire GST revenue loss (including the economic losses caused by the corona), which is about Rs 2.35 lakh crore. For this, a special window facility will be provided with the help of the Reserve Bank.

Indian banks are returning money they borrowed from the central bank earlier this year, boosting the monetary authority’s capacity to make more direct purchases of government bonds. The Reserve Bank of India on Thursday said it would buy 100 billion rupees ($1.4 billion) of bonds from the secondary market on September 24 in the first such direct purchase in six months. This marks a departure from its preference so far this year for Federal Reserve-like Operation Twists.
While direct open market operations end up adding cash to the banking system, twist operations are typically liquidity neutral as they involve simultaneous buying and selling. Sovereign bonds gained on Friday, with the 10-year yield down 2 basis points to 6.01%.
Traders said there is more scope for direct OMOs now because banks are taking the option to return about 1.25 trillion rupees they borrowed from the RBI in February and March. These funds were borrowed when the repurchase rate was at 5.15%, making it more attractive for banks to return it now and look to borrow again at a lower rate. So far, about 989 billion rupees has been repaid in four tranches and the remaining money is expected to be repaid Friday.

The government on Monday said that 35,074 direct tax-related disputes have been resolved under the Vivad se Vishwas scheme as on September 8. This is even as nearly 6 lakh such cases are pending in different forums, including commissioner of appeals, tribunals, high courts and the Supreme Court.
The dispute resolution scheme meant for direct taxes was passed as an Act earlier this year but the deadline for the scheme to avail concessional settlement provision has since been extended to December 31 due to Covid-19. A tax official said that a large number of cases would come under the scheme closer to the deadline.
The government is hoping that a substantial portion of over Rs 10 lakh crore in revenue stuck in these cases can be unlocked through the scheme as it offers exemption from payment of penalty and interest on the disputed tax amount. The penalty and interest often amount to twice as much as the original tax demand.
In case the appeal is filed by the department, the taxpayers choosing to settle dispute and make payment before December 31 will only have to pay half the disputed amount while penalty and interest would be waived off. However, if the case is related to dispute of penalty and interest then only 12.5% of the amount is payable.