GST: As part of the balance GST compensation, the federal government has released Rs 17,000 crore to the states, bringing the total amount distributed this fiscal year to over Rs 1.15 lakh crore, the Finance Ministry reported on Friday.
“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,” the ministry said in a statement.
The government implemented the Goods and Services Tax (GST) on July 1, 2017, and states were guaranteed compensation for any revenue losses resulting from the adoption of GST for a five-year term.
A cess is imposed on specific commodities in order to pay for compensating states, and the money that is collected from the cess is added to the compensation fund.
On November 24, 2022, the federal government made a payment of Rs 17,000 crore to the states and UTs to cover the remaining GST compensation for the months of April to June 2022. The statement said, “Including the aforementioned sum, the total compensation released to the states/UTs to date 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,” the ministry said.
This choice was made to help the states manage their resources and make sure that their programmes, particularly the capital expenditures, are successfully carried out during the fiscal year, it was said.