Auto sector slowdown affecting GST compensation cess kitty: Sushil Modi

KOLKATA: Bihar Deputy Chief Minister Sushil Modi on Friday said the slowdown in the automobile sector has adversely impacted the GST compensation cess fund as sufficient money is not coming into the kitty.

The fund is used to compensate the states for revenue shortfall suffered due to roll out of the new indirect tax.

Sushil Modi, who heads the Group of Ministers (GoM) on GST revenue shortfall, said that the economic slowdown, particularly the muted sales in the automobile sector, is leading to lower collections in the new indirect tax regime.


Speaking at the 'India Today Conclave East' here, he said that the automobile sector is a major contributor to the GST compensation pool.

"Sufficient money is not coming from this sector", he said.

The issue on raising the size of the kitty will be discussed in the next GST Council meeting, scheduled to be held on December 18.

The meeting of all-powerful GST Council is going to be held in the backdrop of lower-than-expected GST collections.

There is money in the GST compensation kitty, but there are some "accounting problems" for which funds cannot be released to the states, he added.