This is the fourth time that IGST funds have been dividend between the Centre and states.
As much as Rs 120 billion was settled between them in August, Rs 500 billion in June and Rs 350 billion in February this year.
A policy decision has been taken that when some substantial amount accrues to IGST pool it should be apportioned so that funds do not lie idle with the Centre, the official said, adding Rs 290 billion has been apportioned this month.
Under GST, the tax levied on consumption of goods or rendering of service is split 50:50 between the Centre and the state. Such tax is known as Central-GST or CGST and State-GST or SGST.
On inter-state movement of goods as well as imports, an Integrated-GST or IGST is levied, which accrues to the Centre. A cess is levied on top of these taxes on sin and luxury goods which make up for the compensation kitty used to make good of any revenue shortfall faced by states on implementation of GST.
Ideally there should be 'nil' balance in the IGST pool since the amount should be used for payment of Central GST and State GST.
As some businesses are ineligible to claim the benefits of input tax credit or ITC, the balance gets accumulated in the IGST pool.
The Finance Ministry has targeted monthly GST collections to be Rs 1 lakh crore for this fiscal, but the actual mop up has fallen short of the target month after month. The sole exception was the month of April in which the numbers exceeded Rs 1 lakh crore.
The collections stood at Rs 940.16 billion in May, Rs 956.10 billion in June, Rs 964.83 billion in July and Rs 939.60 billion in August.
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.