An amount of Rs 36,400 crore has been released by the Centre as GST compensation to the states and union territories for three months till February 2020.
The Centre had already rolled out Rs 1,15,096 crore for the April-November 2019 period, to compensate states and UTs on the account of revenue loss due to GST implementation.
“Taking stock of the current situation due to COVID-19 where state governments need to undertake expenditure while their resources are adversely hit, the central government has released the GST compensation of Rs 36,400 crore to the states/UTs with the legislature for the period from December 2019 to February 2020,” an official statement said.
The Center had discharged Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18 as pay for GST which was turned out on July 1, 2017.
The cess assortment in 2019-20, 2018-19, and 2017-18 financial was Rs 95,000 crore, Rs 95,081 crore and Rs 62,611 crore, individually.
As the remuneration necessity of the states was not as much as a collection in the initial two years (2017-18 and 2018-19) of GST rollout, Rs 47,271 crore GST compensation cess collected had remained unutilized in the compensation pool.
Under the GST law, states were destined to be paid for any loss of income in the initial five years of the GST usage from July 1, 2017. The shortage is determined to expect a 14% annual growth in GST collection by states over the base year of 2015-16.
Under the GST structure, charges are imposed under 5, 12, 18, and 28 percent slabs. On top of the highest tax slab, a cess is demanded on luxury, sin, and demerit goods, and the returns from the same are utilized to remunerate states for any revenue loss.
There were no contrasts between the Center and states concerning compensation payment in 2017-18, 2018-19, and in the initial four months (April-July) of past current monetary (2019-20).
Nonetheless, with income mop-up from remuneration cess falling deficient, the Center kept down reserve move to states for income lack starting August 2019, after which states raised the issue.