New Delhi The Finance Ministry said on Wednesday that the Center has so far transferred 7.35 trillion to the states for Goods and Services Tax (GST) compensation and no amount is pending for the period till the end of FY2011.
The ministry said that including 1.59 trillion released to states under one-on-one loan arrangement, total 2.78 trillion has been released to the states for FY 2011 and nothing was pending for that year.
At present, only for the recently concluded year FY22, the compensation of The ministry said Rs 78,704 crore is pending due to insufficient amount in the GST Compensation Fund, which is equivalent to four months’ compensation.
“Usually, compensation for the ten months of April-January of any financial year is released during that year and the compensation for February-March is released only in the next financial year… out of the ten months of 2021-22 Compensation for eight has already been given. issued to the states. The pending amount will also be released on deposit of the cess amount in the Compensation Fund,” the ministry said in a statement.
At the time of the introduction of the GST, the Constitutional Amendment provided that Parliament would, by law, provide compensation to the states for loss of revenue due to the introduction of GST for a period of five years. Accordingly, the GST Compensation Act was enacted to states, which provides for release of compensation against a 14% year-on-year increase on revenue in 2015-16 from taxes subsumed in GST.
about compensation Rs 49,000 crore released from GST Compensation Fund for FY18, an increase of Rs. 83,000 crore for FY19 onwards 1.65 trillion in 2019-20. For these three years, approximately The ministry said that three trillion compensation had been released to the states.
However, due to the impact of COVID on revenue, the requirement of compensation increased significantly during FY 2011 and to ensure that states have adequate and timely resources to deal with COVID and related issues, the Center borrowed 1.1 trillion in FY 2011 and 1.59 trillion in FY22 and passed it to the states on a back-to-back basis, the ministry said.