Centre unlikely to pay GST compensations to the states due to Pandemic condition

Hussain Saify

According to Finance Ministry; the Centre has released over 1.65 lakh crore rupees as GST compensation to the states in 2019 – 2020.

Parliamentary Panel standing committee has been told by the Central government that it might not be in a condition to pay the Goods and Service Tax (GST) compensation due to the states in the near future.

Opposition member had raised the issue on compensation of GST to the states at a meeting on July 28 according to a report by The Economic Times.

Finance secretary Ajay Bhushan Pandey, Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Guruprasad Mohapatra and other officials were present at the meeting, according to the report.

In the report, the Centre justifies that it might not be able to clear all GST compensations as the impact COVID has created on the economic activity.

Decline in GST will also be seen due to this economic impact, according to the report citing officials.

According to Ministry of Finance, the Centre has released over 1.65 lakh crore as GST compensation for states in 2019-2020 and the total cess collection in FY20 was 95,444 crore.

The government has collected 1.85 lakh crore as GST from April-June 2020 mostly the lockdown period around the country.

Comparatively the collection was less as compared to previous years. The collection previously stood at 3.14 lakh crore during the same period.

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