Bengal has demanded the immediate release of Rs 2,875 crore of GST compensation from the Centre in the wake of the virus outbreak which has crippled revenue collection and increased state’s expenditure to tackle the crisis.

The state finance minister, Amit Mitra, has shot off a letter to Union finance minister Nirmala Sitharaman, seeking the GST compensation that has accumulated over the last fiscal.

“Bengal is yet to receive GST compensation of Rs 1,775 crore up to January 2020, which includes the outstanding compensation for October-November 2019. Moreover, GST compensation for February-March 2020 of around Rs 1,100 crore is also due,” Mitra wrote on Thursday.

The Centre is constitutionally bound to compensate the states for the loss in revenue that may occur during the first five years after the migration to the GST regime from the previous taxation system. However, the Centre has often been found to be reluctant in releasing the funds on time.

“You are aware that the spread of Covid-19 has created a havoc in state finances. Business activities have been hit, severely impacting the revenues of the state. Under these circumstances, the non-receipt of GST compensation from the central government has aggravated the already stretched state finances,” Mitra wrote.

The letter comes a day after Bengal chief minister Mamata Banerjee demanded Rs 25,000 crore from the Centre to combat the virus outbreak.