States yet to receive Rs 37,134 cr as GST compensation for year ended March

Goods and Services Tax (GST) compensation of Rs 37,134 crore is pending for states and union territories for the year ended March 2021 and Rs 14,664 crore for April-September 2021 period, Minister of State for Finance Pankaj Chaudhary informed the parliament. 

Ten states have pending GST dues of more than Rs 1,000 crore for FY 2020-21 yet to be paid by the central government. The highest pending dues are for Maharashtra at Rs 6,723 crore for FY 2020-21, and Rs 6,430 crore for FY 2021-22.

The delays are a result of the economic challenges arising from the COVID-19 pandemic. Pandemic led to higher compensation requirements due to lower GST collection and, at the same time, lower collection of GST compensation cess, the government said. 

“As per the decision of GST Council, Rs 1.1 lakh crore for FY 2020-21 and Rs 1.59 lakh crore for FY 2021-22 has been released to states/ UTs as back-to-back loan to meet the resource gap of the states/UTs due to shortfall in GST compensation,” the minister said in a statement.

The release of this amount was also front-loaded to states to help them take up capital expenditure during the ongoing financial year, the ministry said.

The central government has released compensation based on availability to make up for the shortfall, as the GST compensation fund was unable to meet the complete requirements of the states. 

The statement also said that GST compensation for financial years 2017-18, 2018-19 and 2019-20 was already paid to the states and a part of the compensation payable in FY21, amounting to over Rs 1.3 lakh crore, was released.

“The Centre is committed to release full GST Compensation to the States/UTs as per GST (Compensation to States) Act, 2017, for the transition period by extending the levy of compensation cess beyond five years to meet the GST revenue shortfall as well as servicing the loan borrowed through special window scheme,” the statement said

As far as states’ share of central portion of GST is concerned, it is released regularly, the government said.