economy

States have ₹51,000 crore provisional GST compensation dues

States have ₹51,000 crore provisional GST compensation dues

New Delhi: After financing around ₹2.7 trillion of states’ GST compensation shortfall by way of debt and transferring proceeds of cess collected, the provisional GST compensation dues stood at ₹51,798 crore, minister of state for finance Pankaj Chaudhary informed Parliament on Monday. Quoting figures for FY21 and the first half of FY22, the minister said that the dues for FY21 stood ₹37,134 crore and that for the April-September period of this fiscal ₹14,664 crore. The minister said that as per GST Council’s decision, ₹1.1 trillion for FY21 and Rs. 1.59 trillion for FY22 has been released to states and union territories as back-to-back loan to meet their resource gap due to shortfall in GST compensation. “Release of this amount has been front loaded during the financial year to enable states/union territories to undertake capital expenditure, the minister said. In addition, depending on the amount available in the GST compensation fund, Centre has also been releasing the regular GST compensation to states to make up for GST revenue shortfall, the minister informed Lok Sabha in a written reply to a question. As per law, compensation for financial years FY18, FY19 and FY20 has already been paid. The economic impact of the pandemic has led to higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess. GST compensation of Rs. 1.3 trillion has been released to states and union territories to partly meet the compensation payable for FY21 as the amount in GST Compensation Fund was not adequate to meet the full compensation requirement. “Centre is committed to release full GST compensation to the states/union territories as per GST (Compensation to States) Act, 2017 for the transition period by extending the levy of compensation cess beyond five years to meet the GST revenue shortfall as well as servicing the loan borrowed through special window scheme, the minister said. As far as states’ share of central portion of GST is concerned, it is being released regularly, the minister informed Parliament. The Centre frontloaded the fiscal transfers to states so that states are able to make their capital spending early in the financial year. Download.

economy 2021-12-13 Livemint