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Govt releases Rs 17,000 crore to states/UTs towards balance GST compensation

28 Nov 2022 Evaluate

The Finance Ministry has said that the central government released an amount of Rs 17,000 crore to states/UTs on November 24, 2022, towards the balance Goods and Services Tax (GST) compensation for the period April to June 2022. The total amount of compensation released to the states/UTs so far, including the aforesaid amount, during the year 2022-23 is Rs 1,15,662 crore. This is despite the fact that total Cess collection till October 2022 is only Rs 72,147 crore and the balance of Rs 43,515 crore is being released by the Centre from its own resources.

With this release, the Centre has released, in advance, the entire amount of Cess estimated to be collected this year till March-end available for payment of compensation to States. This decision was taken to assist the states in managing their resources and ensuring that their programmes, especially the expenditure on capital are carried out successfully during the financial year.

GST was introduced in the country with effect from July 1, 2017, and states were assured of compensation for the loss of any revenue arising on account of the implementation of GST for a period of five years. For providing compensation to states, a cess is levied on certain goods and the amount of cess collected is credited to the compensation fund.

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