Centre releases Rs 35,000 crore GST payment to states

States had not been paid compensation for loss of revenue due to GST implementation since August.

GST compensation to states, Centre pays GST to states, pending GST payments, Nirmala Sitharaman, indian express

On Monday, Sitharaman had said the Centre “would not renege” on the promise of GST compensations. (File)

With the crucial GST Council meeting coming up, the Centre Monday released about Rs 35,000 crore to states and Union Territories as pending compensation.

The GST Council — the highest decision-making body of the tax regime — is to meet on December 18.

“The central government has released GST compensation of Rs 35,298 crore to States and Union Territories today,” Central Board of Indirect Taxes and Customs (CBIC) said in a tweet.

Recently, governments of various states had flagged the issue of pending GST payments from the Centre, saying the lack of funds was affecting their infrastructure projects.

The matter was also raised in Parliament last week, with Finance Minister Nirmala Sitharaman saying the Centre was committed to discharging its obligation.

On Monday too, Sitharaman said the Centre “would not renege” on the promise of GST compensations.

“It is certainly their right, I am not denying. At the same time, I am also making it clear to say that I am not reneging on that. States will be given,” Sitharaman was quoted by PTI as saying.

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“I do not want them (states) to feel embarrassed because it’s not their fault nor is it personally my fault,” she said, admitting that GST collections have been lower than expectations. The finance minister attributed the dip in collections to a slip in GST filing due to natural calamities and also due to a slowdown in consumption.

Earlier in November, five states — Kerala, West Bengal, Delhi, Rajasthan and Punjab — had come out with a joint statement, saying they were facing “acute pressure” on their fiscal situation due to the delayed payment from the Centre.

“No explanation whatsoever has been furnished for this delay of nearly one month. As a result, states are facing acute pressure on fiscal, some already resorting to ways and means or even overdrafts,” the statement, signed by the finance ministers of the five states, had said.

(With PTI inputs)