The Minister of State for Finance, Mr Pankaj Chaudhary, said that more than Rs.81,000 crore Goods and Services Tax (GST) compensation is due to states for FY 2020-21. He also informed that more than Rs.55,000 crore is pending for April 2021 and May 2021. He announced this in a written reply to a question in the Lok Sabha on 19th July 2021.
The minister stated that the Centre had released the GST compensation of Rs.91,000 crore to all states/UTs to partially meet the compensation payable for FY 2020-21 as the amount in the GST compensation fund was not adequate to meet the full requirement. He added that the pandemic impact on the economy has led to higher compensation requirements due to lower collections of GST and the compensation cess.
The minister gave details of GST compensation yet to be released for FY 2020-21 to 27 states/UTs for an amount of Rs.81,179 crore. The major states which have to receive compensation for FY 2020-21 include:
|S.No||Name of the state||Compensation cess due
(Rs. in crore)
Coming to FY 2021-22, the Centre has already released Rs.75,000 crore to states/UTs on 15th July 2021. However, Rs.55,345 crore is yet to be paid for April and May 2021 to 26 states and UTs. The major states which have to receive compensation for FY 2021-22 are Maharashtra (Rs.7,995 crore), Karnataka (Rs 5,500 crore), and Gujarat (Rs.3,603 crore).
The minister said that the GST compensation to states was deliberated in the 41st and 42nd GST Council meetings. Accordingly, the Centre had borrowed Rs 1.1 lakh crore in 2020-21 under a special window. It passed it onto states as a back-to-back loan to help them meet the resource gap due to a shortfall in compensation due to inadequate balance in the compensation fund.
He also mentioned that depending on the amount available in the compensation fund, the Centre has released the compensation regularly to states to make up for the GST revenue shortfall. The minister further said GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to states.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.