The central government on Tuesday, 31 May, cleared the entire amount of Goods and Service Tax (GST) payable to states till date, amounting to Rs 86,912 crore, as per the Finance Ministry.
Out of the total amount, Rs 25,000 crore was released from the GST compensation fund, while the remaining 61,912 crore was released by the government from its own resources, pending the collection of cess.
'Decision Taken To Help States Manage Resources': Finance Ministry
In a statement, the finance ministry said that "the decision was taken to assist the states in managing their resources and ensuring that their programmes, especially the expenditure on capital, is carried out successfully during the financial year," news agency PTI reported.
While Rs 17,973 was released towards the dues for April and May, Rs 21,322 was released towards dues during February and March. On the other hand, Rs 47,617 was the balance of compensation payable up to January 2022.
GST was introduced in the country from 1 July 2017. The Centre, while introducing it, had assured the states that they would be compensated for losses in revenue arising out of the implementation of GST over a period of five years.
To provide compensation to states, cess was being levied on certain goods, and the amount of cess was being credited to the compensation fund.
Bimonthly GST compensation from 2017-18 and 2018-19 was given to the states on time, as per PTI.
As the protected revenue of the states has been growing at 14 percent compound growth, the collection of cess did not increase by the same proportion. Moreover, the COVID-19 pandemic also increased the gap between protected revenue and actual revenue.
To reduce this gap, the Centre had borrowed and released Rs 1.1 lakh crore from 2020-21 and Rs 1.59 lakh crore from 2021-22.
(With inputs from PTI.)
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