Approval of GST Compensation: The Center on Tuesday, May 31, said that it has released the full amount of GST compensation to the states, which was till May 31, 2022. In a statement, the Finance Ministry said that the government India An amount of Rs 86,912 crore has been released to the states as part of GST compensation arrears. The decision has been taken despite the fact that only around Rs 25,000 crore is available in the GST Compensation Fund, the Finance Ministry said in its statement that day.
The ministry said the decision was taken to ensure that the capital expenditure of the states remains on track. “Government of India has released the entire amount of GST compensation payable to the states till May 31, 2022 by releasing an amount of Rs 86,912 crore. This decision was taken to assist the states in managing their resources and ensure that their programs especially capital expenditure are successfully carried out during the financial year,” read the finance ministry statement.
“This decision has been taken despite the fact that only around Rs 25,000 crore is available in the GST Compensation Fund. The balance amount is being released by the Center from its own resources, pending collection of cess,” it added. As the Center has paid the dues till May this year, only GST is due for June 2022.
Bi-monthly GST compensation to the states for the period 2017-18, 2018-19 was released on time from the Compensation Fund. “As the protected revenue of states is growing at a compound growth of 14 per cent, while cess collection has not grown in the same proportion, COVID-19 has further widened the gap between protected revenue and actual revenue receipt, including reduction in cess collection ,” the ministry said on Tuesday.
The Center said that to meet the resource gap of states due to low release of compensation, it has released Rs 1.1 lakh crore in 2020-21 and Rs 1.59 lakh crore in 2021-22 as back-to-back loans . To meet a part of shortfall in cess collection. “All the states have agreed to the above decision. In addition, the Center is also releasing regular GST compensation from the fund to meet the shortfall.
Here are the details of GST compensation payable for the previous financial years and for the April-May period of the current financial year:
Outstanding for the months of April and May, 2022: Rs 17,973 crore
Outstanding for the months of February and March, 2022: Rs 21,322 crore
Balance amount of compensation payable till January 2022: Rs 47,617 crore
Maharashtra received the highest GST compensation arrears of Rs 14,145 crore, followed by Tamil Nadu at Rs 9,602 crore and Uttar Pradesh at Rs 8,874 crore.
What is GST?
The Goods and Services Tax was implemented in the country with effect from 1st July, 2017 and states were assured compensation for any loss of revenue caused by the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017. was. Five years old “In order to provide compensation to the states, cess is being levied on certain items and the amount of cess collected is being deposited in the Compensation Fund. Compensation to the states is being paid from the Compensation Fund with effect from July 1, 2017,” the Finance Ministry said.
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