GST compensation of ₹81,043 crore given to states for April-Sept

Source: The Hindu

In a written reply to Rajya Sabha, Minister of State for Finance Anurag Singh Thakur said that the Centre has released ₹81,043 crore as GST compensation to states for April-September 2019. He added that since October 2019 the GST compensation cess mop-up had shown an upward trend. GST compensation cess of ₹7,607 crore was collected in October, ₹7,727 crore in November, ₹8,331 crore in December and ₹8,637 crore in January 2020.

The targeted amount to be collected from cess in Goods and Services Tax (GST) was ₹1.09 lakh crore for 2019-20. Out of this targeted amount, a total of ₹70,534 crore has been collected between April-December 2019. Mr Thakur said that the amount of GST compensation released to states for April-September 2019 stood at ₹81,043 crore.

For the financial year 2018-19, the net collection from GST compensation cess stood at ₹95,081 crore as against the target of ₹90,000 crore. For the full fiscal, the government had released ₹81,141 crore as compensation to states. Similarly, the net collection for FY18 from cess stood at ₹62,612 crore as against the target of ₹61,331 crore. The government had at that time released ₹48,785 crore as compensation amount to states.

Under the GST law which came into force on 1^st July 2017, the states were guaranteed to be paid for any revenue loss in the first five years of GST implementation. The shortfall is calculated assuming a 14% annual growth in GST mop-up by states over the base year of 2015-16.

In the written reply, Mr Thakur said, “For providing such compensation to states, compensation cess is being levied on certain luxury and demerit goods as per provisions in Section 8 of the GST (Compensation to States) Act, 2017, and compensation cess is being credited into a non-lapsable Fund known as Goods and Services Tax Compensation Fund which forms part of the Public Account of India.”