The Central government released Rs 19,950 crore as Goods and Services Tax (GST) compensation cess to the states and union territories last Monday, officials said.
With this amount, the Central government has released a total of Rs 1,20,498 crore towards GST compensation to the States/UTs during current financial year, a statement said. However, only Rs 78,874 crore have been collected as compensation cess in the current FY (till January 31, 2020).
Finance Ministry officials said that a total GST compensation cess of Rs 62,611 crore was collected in FY 2017-18, out of which Rs 41,146 crore was released to the states/UTs in FY 2017-18 as GST compensation. Further, in FY 2018-19, Rs 95,081 crore was collected as GST compensation cess of which Rs 69,275 crore were released to the states/UTs.
Officials said that as on March 31, 2019, an amount of Rs 47,271 crore compensation cess collected had remained unutilised after the release of GST compensation to the states/UTs in FYs 2017-18 and 2018-19.
This compensation was to come out of a pool that is to be created by levy of cess on certain sin and luxury goods over and above the GST tax rate. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.
In FY 2018-19, Rs 95,081 crore was collected as GST compensation cess of which Rs 69,275 crore was released to the states/UTs as GST compensation.
This comes after a PTI report in the beginning of February quoted an official as saying that the Centre will soon release another Rs 35,000 crore to states to compensate for the revenue loss on account of GST rollout.
Under the Goods and Services Tax (GST) law, States are guaranteed compensation for revenue loss for 5 years if their revenue does not increase 14% on the base year of 2015-16.
On Thursday, former CM of Karnataka Siddaramaiah slammed the Centre for reduced fund allocations to the state.
He said that while Karnataka had expected to receive Rs 17,249 crore as GST compensation in 2019-20, the state received only Rs 8,815 crore.
Not just Karnataka, several states had been complaining of delayed GST returns as it was affecting their