The compensation amount to be paid from the compensation fund is established by levying tax on the highest tax bracket on luxury, demerit and sin goods.

More than Rs 53,600 crore in GST compensation for the current tax has yet to be released to the states, Finance Minister Nirmala Sitharaman said in the Rajya Sabha on Tuesday.

So far, this fiscal Rs 96,576 crore has been released to the states due to GST compensation, and an additional Rs 1.59 lakh crore has been given as a back-to-back loan to offset the income shortfall due to Goods and Services Tax (GST) implementation.

Under the Goods and Services Tax (GST) Act, beginning July 1, 2017, states were guaranteed bi-monthly compensation for any lost revenue in the first five years of GST implementation.

The deficit is calculated assuming a 14 percent annual growth in GST collections by states over the 2015-16 base year.

The compensation amount to be paid from the compensation fund is established by levying tax on the highest tax bracket on luxury, demerit and sin goods.

“Centre is committed to releasing full GST compensation to the States/UTs under the GST (Compensation to States) Act, 2017 for the transition period by extending the levy of compensation beyond 5 years to make up for the GST deficiency. income and to borrow the loan through a special framework plan,” said Sitharaman.

The minister gave details of the GST compensation yet to be released to the states before the current fiscal end of March, saying that Rs 53,661 crore is yet to be released for the 2021-22 fiscal year.

This includes Rs 11,563 crore to be released to Maharashtra, Rs 6,954 crore to Uttar Pradesh, Rs 6,733 crore to Tamil Nadu, Rs 5,461 crore to Delhi and Rs 4,292 crore to West Bengal.

Sitharaman further said that GST compensation for fiscal years 2017-18, 2018-19, 2019-20 and 2020-21 has already been paid to the states/UTs.

“The economic impact of the pandemic has resulted in a higher compensation claim due to lower GST collection while at the same time lower collection of GST compensation,” she said.

In a separate reply, Finance Minister Pankaj Chaudhary said the total GST collection during the current fiscal year to February is over Rs 13.33 lakh crore. This includes central GST clearing of over Rs 2.43 lakh crore, integrated GST of over Rs 6.87 lakh crore, state GST of over Rs 3.11 lakh crore and cess of Rs 90,442 crore.

“CGST is credited to the Consolidated Fund of India (CFI) while SGST is credited to the Consolidated Fund of the respective states. Of this total IGST collected by the Center, the Center received Rs 3,09,150 crore until February 2022 and Rs 2,60,467 crore has been received by the States through a settlement (regular and ad hoc) from IGST,” said Chaudhary.


This post More than Rs 53,600 crore GST compensation yet to be released to states, says FM Nirmala Sitharaman was original published at “https://www.financialexpress.com/economy/over-rs-53600-crore-gst-compensation-yet-to-be-released-to-states-this-fiscal-says-fmnirmala-sitharaman/2461859/”

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