States to receive Rs.53000-Cr from Centre as GST compensation

The payment of roughly Rs 53,000 crore as Goods and Services Tax (GST) compensation to states for the current financial year is pending, Finance Minister Nirmala Sitharaman said. In response to a debate in the Lok Sabha on the Finance Bill 2022, Sitharaman stated that the federal government has not discriminated in the distribution of GST compensation to states. "Please, no more politics. According to the GST Council's resolution, each state receives reimbursement Finance Minister said. "Many members raise their dues because this state's and that state's dues are so high. Those are not my decisions. The debts have been agreed upon... now, Rs 53,000 crores are owed, which is also a figure set by the council "said Sitharaman.

So far this year, the Union Finance Ministry has disbursed Rs 96,576 crore to states and union territories (UTs) to cover revenue shortfalls caused by the implementation of the Goods and Services Tax (GST). Union Finance Minister Nirmala Sitharaman recently informed the Rajya Sabha that the states and UTs had been given an additional Rs 1.59 lakh crore as a back-to-back loan. The minister said, the states have yet to get Rs 53,661 crore in GST compensation for the current fiscal year. The centre has committed to pay states and Union Territories (UT) with the Legislative Assembly for any revenue loss as part of the implementation of the new tax regime. On July 1, 2017, the Goods and Services Tax (GST) regime went into effect. For the first five years of implementation, the centre has promised to cover the revenue deficit.

Sitharaman said that GST Council has already extended the GST compensation cess till March 2026.