Karnataka on Saturday sought extension of the Compensation Act beyond 2022 to bridge the revenue gap likely to arise out of a shortfall in the collection of the Goods and Services Tax (GST). Chief Minister H.D. Kumaraswamy said at the fifth meeting of the governing council of Niti Aayog in New delhi "The Compensation Act should be extended beyond 2022 in case the revenue gap is not bridged by then to compensate our state, as envisaged in the Act".

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Furthermore as the GST regime has taken over the state's resource mobilization efforts, the chief Minister said revenue shortfall would adversely impact developmental and other infrastructural projects across the state as well as the committed expenditure of the state government. Reportedly the meeting was chaired by Prime Minister Narendra modi, as Chairman of Niti Aayog, attended by its members and chief ministers from across the country. Kumaraswamy pointed out "As our state will have limited scope to mobilize additional revenue beyond 2022, there would be a steep fall in our revenues by the end of fiscal 2022-23, as compared to protected revenue till fiscal 2021-22 due to the constitutionally guaranteed compensation".



The CM added “Capacity building programs to tax officers, awareness to stakeholders and other measures have, however, had a positive impact in enhancement of revenue when compared to the previous fiscal”.


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