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Home / Business / States get Rs 35,000cr GST cess

States get Rs 35,000cr GST cess

This compensation was to be released after every two months but it was pending since August
When the GST was rolled out on July 1, 2017, states were promised compensation for the loss of revenue
When the GST was rolled out on July 1, 2017, states were promised compensation for the loss of revenue
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PTI   |   New Delhi   |   Published 16.12.19, 07:05 PM

The central government on Monday released Rs 35,298 crore to states to make up for the loss of revenue because of the rollout of the Goods and Services Tax (GST).

“The central government has released GST compensation of Rs 35,298 crore to states and Union Territories on Monday,” the Central Board of Indirect Taxes and Customs (CBIC) said in a Twitter post.

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This comes just days before the 38th meeting of the GST Council on December 18, where the Opposition-ruled states had planned to again raise the issue of delayed payments.

When the GST was rolled out on July 1, 2017, states were promised compensation for the loss of revenue. The compensation amount was fixed at 14 per cent on top of revenue in the base year of 2016-17. The corpus for paying compensation was collected by levying a cess over the GST rates on tobacco products, cigarettes, aerated water, automobiles and coal.

This compensation was to be released after every two months but it was pending since August, drawing protests from states, particularly the non-BJP ruled ones.

Opposition-ruled states such as Punjab, Bengal and Kerala have since last month upped the ante for the immediate release of GST compensation fund. Their finance ministers had also met Union finance minister Nirmala Sitharaman and the issue came up during the just-concluded winter session of Parliament.

Sitharaman had in press conferences and industry events acknowledged the dues but never mentioned timelines for making the payment.

FM assurance

On Monday, Sitharaman, speaking at a business conclave, assured states that the Centre will not “renege” on the promise of GST compensations.

The delays to pass on the money are due to slippages in collections and the states have nothing to be embarrassed about, she said. “It is certainly their right, I am not denying. I am also making it clear to say that I am not reneging on that. States will be given. We are certainly not reneging on it. I admit that the payments which had to go to the compensation head have not been given for two months slot.” 



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