Payment of GST compensation to States in times of COVID-19 pandemic
GST
Dated:- 7-12-2021
As per the provisions of the GST (Compensation to States) Act, 2017, GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to the States. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.
The Minister further stated that 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. Recently, Centre released ₹ 17,000 crore on 03.11.2021 towards GST compensation to States from the Compensation Fund. Details of GS
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sed to States/ UTs as back-to-back loan to meet the resource of the States/UTs due to shortfall in GST compensation. Release of this amount has been front loaded during the financial year to enable States/UTs to undertake capital expenditure. In addition, depending on the amount available in the Compensation Fund, Centre has also been releasing the regular GST compensation to States to make up for GST revenue shortfall.
The Minister stated that taking into account, the GST compensation released from Compensation Fund as well as back-to-back loan released in FY 2020-21 and FY 2021-22, GST compensation of ₹ 37,134 crore for period April'20 to March'21 and ₹ 14,664 crore for April-September'21 is pending to States/ UTs as per prov
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