“The economic impact of the pandemic has led to higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess,” he added.
The minister also gave details of GST compensation yet to be released to states. Total Rs 81,179 crore is due to 27 states and UTs for 2020-21, while for the first two months of the current fiscal (April and May) Rs 55,345 crore is outstanding payment to 26 states and UTs.
The amount due to major states for 2020-21 include Maharashtra (Rs 15,138 crore), Karnataka (Rs 7,202 crore), Uttar Pradesh (Rs 7,109 crore), Gujarat (Rs 6,583 crore), Tamil Nadu (Rs 6,155 crore), Delhi (Rs 5,190 crore), West Bengal (Rs 3,911 crore) and Punjab (Rs 3,752 crore).
For April-May 2021, the amount due to Maharashtra is Rs 7,995 crore, Karnataka (Rs 5,500 crore) and Gujarat (Rs 3,603 crore).
Chaudhary further said the issue of GST compensation to states was deliberated in the 41st and 42nd GST Council meetings.
Accordingly, in 2020-21, the Centre had borrowed Rs 1.1 lakh crore under a special window and passed it on to states as back-to-back loan to help them meet the resource gap due to short-release of compensation on account of inadequate balance in the compensation fund.
Subsequent to deliberations in the 43rd GST Council meeting, it has been decided that the Centre will borrow Rs 1.59 lakh crore from the market through special window in current fiscal year and pass it on to states/ UTs as a back-to-back loan in appropriate tranches as was done last year.
Rs 75,000 crore was released to States/ UTs on July 15, 2021.
“In addition, depending on the amount available in the Compensation Fund, the Centre has also been releasing the regular GST compensation to states to make up for GST revenue shortfall,” he added.
The minister further said GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to states.
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