The Ministry of Finance released a press note stating that the Central government has released Goods and Services Tax (GST) compensation of Rs.30,000 crore to states as compensation to be paid for the FY 2020-21. It also stated that the total compensation released so far for the FY 2020-21 is Rs.70,000 crore.
A loan of Rs.1,10,208 crore has also been released in consecutive instalments as per the decision of the GST Council in lieu of shortfall in GST compensation’s release for FY 2020-21.
In addition to the above, the Centre has also released Rs.28,000 crore by way of ad-hoc settlement of IGST on 30th March 2021. Out of the ad-hoc settlement, an amount of Rs.14,000 crore has been given to states and Rs.14,000 crore to the Centre.
After considering the release of GST compensation, consecutive loan, and ad-hoc IGST settlement, around Rs.63,000 crore of GST compensation is pending to states/UTs for the FY 2020-21.
Currently, the taxes are levied as 5%, 12%, 18%, and 28% slabs under the GST structure. GST cess is levied over and above the regular GST rate on luxury, sin, and demerit goods. The compensation proceeds are used to compensate states for any revenue loss caused due to the implementation of GST.
For any clarifications/feedback on the topic, please contact the writer at firstname.lastname@example.org.
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.