About Rs 52,000 cr GST compensation pending to states till Sept: FinMin

Nearly Rs 52,000 crore of GST compensation was due to the states as of September 2021, Parliament was informed on Monday.

Giving details of Goods and Services Tax (GST) compensation released and pending to be released as on November 24, 2021, Minister of State for Finance Pankaj Chaudhary said in the Lok Sabha that Rs 1,10,208 crore and Rs 1.59 lakh crore was released to the states as back to back loan in 2020-21 and 2021-22 fiscals, respectively.

Total GST compensation pending till September 2021 stood at Rs 51,798 crore, he said.

This includes Rs 13,153 crore pending to Maharashtra, Rs 5,441 crore to Uttar Pradesh, Rs 4,943 crore to Tamil Nadu, Rs 4,647 crore to Delhi and Rs 3,528 crore to Karnataka.

States of Arunachal Pradesh, Manipur, Mizoram and Nagaland do not have any GST compensation pending from the Centre.

In reply to a separate question, Chuadhary said the Centre has released Rs 17,000 crore on November 3, 2021, towards GST compensation to states from the compensation fund.

This is in addition to GST compensation of Rs 43,303 crore released to states and Rs 1.59 lakh crore as back to back assistance during the current financial year.

"During 2020-21 (April 2020- March 2021), the Centre had released compensation of Rs 1,36,988 crore and back to back loan assistance of Rs 1.1 lakh crore," he said.

Under the GST law, states are compensated for any loss of revenue arising on account of implementation of GST for five years till June 2022.

The compensation amount to be paid from the compensation fund which is arrived at by levying cess on top of the highest tax slab on luxury, demerit and sin goods.

GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to the states.

Chaudhary said 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.

Since collections in the compensation fund are falling short of requirement, for 2020-21 and 2021-22 fiscals the Centre has borrowed funds worth Rs 1.10 lakh crore and Rs 1.59 lakh crore, respectively and passed it on to the states as back-to-back loans.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel