The entire amount of GST compensation (Up to 31st May, 2022) payable to the States amounting to Rs. 86,912 cr has been released by the Government of India (GOI).
Despite the fact that about only Rs. 25,000 cr is available in the GST compensation fund, the decision has been taken.
The Centre has released the balance of the compensation amount from its own resources pending collection of cesses.
a. Assisting the states in managing their resources; &
b. Ensuring that their programmes especially the expenditure on capital is carried out successfully
The decision was taken.
As assured by the Centre, the States were to be compensated for loss of any revenue arising on account of implementation of GST for a period of five years, as per the provisions of the GST (Compensation to States) Act, 2017
Cess levied on certain goods is being credited to Compensation Fund, which then be used to provide compensation to States.
The States protected revenue has been growing at the 14% compounded growth, however the cess collection did not increase in the same measure. Further gap has been increased by COVID-19 between protected revenue and the actual revenue receipt including reduction in cess collection.
Centre has borrowed and release Rs. 1.1 Lac Cr in 2020-21 to meet the resource gap of the states due to short release of compensation. Also, to meet a part of the shortfall in cess collection, Rs. 1.59 Lac Cr. has been borrowed in 2021-22 as back – to – back loan.
Also, regular GST compensation from the Fund has also been releasing by the Centre to meet the shortfall.
The States have gone along to the above decision.
Due to the collective efforts by the Centre and the States, a remarkable advancement has appeared in the GST collection including the Cess.
The details of GST compensation payable are given as per the table below: -
|Dues for the month of April and May, 2022||Rs. 17,973 Cr.|
|Dues for the month of February and March, 2022||Rs. 21,322 Cr.|
|Balance of compensation payable upto January, 2022||Rs. 47,617 Cr.|
|Total||Rs. 86,912 Cr.|
(State wise breakup given in separate table)
With this release of Rs. 86,912 Cr., the compensation to states till May, 2022 gets fully paid and only compensation for June, 2022 would remain.
STATE WISE BREAKUP
|S. No.||Name of State/UT||Amount released (Amount Rs. In Crore)|
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