Source: The Hindu
In a written reply to Rajya Sabha, Minister of State for Finance Anurag Singh Thakur said that the Centre has released ₹81,043 crore as GST compensation to states for April-September 2019. He added that since October 2019 the GST compensation cess mop-up had shown an upward trend. GST compensation cess of ₹7,607 crore was collected in October, ₹7,727 crore in November, ₹8,331 crore in December and ₹8,637 crore in January 2020.
The targeted amount to be collected from cess in Goods and Services Tax (GST) was ₹1.09 lakh crore for 2019-20. Out of this targeted amount, a total of ₹70,534 crore has been collected between April-December 2019. Mr Thakur said that the amount of GST compensation released to states for April-September 2019 stood at ₹81,043 crore.
For the financial year 2018-19, the net collection from GST compensation cess stood at ₹95,081 crore as against the target of ₹90,000 crore. For the full fiscal, the government had released ₹81,141 crore as compensation to states. Similarly, the net collection for FY18 from cess stood at ₹62,612 crore as against the target of ₹61,331 crore. The government had at that time released ₹48,785 crore as compensation amount to states.
Under the GST law which came into force on 1st July 2017, the states were guaranteed to be paid for any revenue loss in the first five years of GST implementation. The shortfall is calculated assuming a 14% annual growth in GST mop-up by states over the base year of 2015-16.
In the written reply, Mr Thakur said, “For providing such compensation to states, compensation cess is being levied on certain luxury and demerit goods as per provisions in Section 8 of the GST (Compensation to States) Act, 2017, and compensation cess is being credited into a non-lapsable Fund known as Goods and Services Tax Compensation Fund which forms part of the Public Account of India.”
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