States pressurized for GST compensation, Center gives Rs 14,103 crore
- The government had released Rs 19,950 crore in the first installment.
- Payment of arrears of October-November with the second installment
Recently, Punjab Chief Minister Captain Amarinder Singh wrote a letter to the Central Government. In this letter, Amarinder Singh had asked the government to pay the outstanding amount of Goods and Services Tax (GST) compensation.
According to the news agency PTI, now the central government has paid an installment of dues (Rs 14,103 crore). The Center has released these funds at a time when the state governments are struggling with the cash problem due to ‘lockdown’ to prevent the coronavirus.
34,000 crore payment
Agency sources said that with this fresh payment, the finance ministry has paid a total of Rs 34,000 crore pending arrears in the GST compensation for October and November. According to sources, in the first installment, Rs 19,950 crore was released on February 17, while the remaining amount of Rs 14,103 crore was released to the states and union territories on Tuesday.
If sources of the news agency are to be believed, the Finance Ministry is also considering the pending arrears of December and January and it can be released in a phased manner. The Center has paid Rs 2.45 lakh crore as compensation to the states since the implementation of GST on July 1, 2017.
Why is the center paying?
Explain that in the GST law, states have been guaranteed to compensate for any loss in revenue in the first five years of GST implementation. The GST Act came into force on 1 July 2017. The shortfall is calculated by considering a 14 percent annual increase in GST collections from the base year 2015-16. Under GST, taxes on goods are levied in slabs of 5,12,18 and 28 percent.
GST collection dropped in March
Let us know that the GST collection in March was below Rs. 97,597 crore below the psychological level of one lakh crore rupees. It was for the first time in four months that the GST collection remained below Rs 1 lakh crore. The reason for this is the nationwide bandh for the prevention of corona virus. The GST collection in March this year is 8.4 percent less than the Rs 1.06 lakh crore collected in the same month of last year.