NEW DELHI: THE Centre said on Monday that it has released Rs 35,298 crore as partial payment of Goods and Services Tax (GST) compensation to states and union territories. Coming two days ahead of the GST Council meeting on Wednesday, the payout could cool Oppositionruled states’ ire over the inordinate delay in payments.
Payments are supposed to be made every two months, but the Centre has not been able to do so. States say Rs 40,000 crore is due for the month of August and September alone. Payment for October and November is now pending and would work out to a similar sum.
The Centre has not said how much it owes states after the latest payment. Finance Minister Nirmala Sitharaman recently said the delay was due to a “slip in collections”. The remarks come at a time when states like Maharashtra and Kerala have been demanding the compensation sooner.
The compensation amount was fixed at any shortfall overstate revenues in the year 2016-17 plus 14 per cent. The corpus for paying compensation was collected by levying a cess on top of GST rates on luxury products such as cigarettes, aerated water and automobiles.
The finance minister had earlier informed Parliament the total cess collected in 2017-18 was Rs 62,596 crore, of which Rs 41,146 crore had already been released to states.
The remaining Rs 15,000 crore was accumulated in the Cess Fund. In the next year, Rs 95,081 crore was collected and Rs 69,275 crore released. Earlier in the day, Sitharaman assured states that the Centre will not “renege” on the promise of GST compensations.