Over ₹37,134cr GST compensation due to states for 2020-21
The Central government owes over ₹37,134 crore to state governments as Goods and Services Tax (GST) compensation for the year 2020-21, the finance ministry told the Lok Sabha on Monday in response to a query by Janata Dal (United) MPs Dinesh Chandra Yadav, Kaushalendra Kumar and Rajiv Rajan on whether GST dues were not being paid to the states as per their entitlement.
The finance ministry said ₹37,134 crore was owed to the states as GST compensation for2020-21 including ₹14,664 crore for the April-September 2021 quarter.
“The economic impact of the pandemic has led to higher compensation requirements due to lower GST collection and at the same time [there is] lower collection of GST compensation cess,” the ministry said, explaining the reason for the dues.
The ministry added that a part of the GST compensation of ₹1,30,464 crore for April ’20 to March ’21 could be released since the GST Compensation Fund was running short due to the economic impact of the pandemic.
The Centre owes the maximum dues of ₹6, 723 crore to Maharashtra, followed by ₹3,528cr to Karnataka, ₹3,145cr to Gujarat, ₹3,125cr to Uttar Pradesh and ₹2,894cr to Tamil Nadu.
The dues have come down significantly since the monsoon session of Parliament, when Maharashtra was to due to be paid ₹15,138 crore and Karnataka and Uttar Pradesh were owed ₹7,202cr and ₹7,109cr, respectively.
For April-September 2021, the government said it doesn’t owe any GST compensation to as many as 21 states including Bihar, Chhattisgarh, Kerala and Rajasthan.
The ministry said that the Centre is committed to releasing the full GST compensation to the states and union territories for the transition period by extending the levy on the compensation cess beyond five years to meet the shortfall as well as by servicing the loan through a special window scheme.
The Centre told the Parliament in July that it had borrowed ₹1.1 lakh crore under the special window scheme.