Home News GST compensation paid to states declines to Rs 11,900 crore in Aug-Sept

GST compensation paid to states declines to Rs 11,900 crore in Aug-Sept

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GST compensation paid to states by the Centre has declined to over Rs 11,900 crore during August-September, an official said.

The bi-monthly GST compensation paid during the June-July period was Rs 14,930 crore, nearly four-fold jump from Rs 3,899 crore paid in April and May.

“Over Rs 11,900 crore has been released to the states from GST compensation fund during August-September after regular and ad-hoc settlement of IGST fund,” an official told PTI.

The government collected a record Rs 1,00,710 crore from Goods and Services Tax (GST) in the month of October. The returns filed and taxes collected in October reflect purchase and sale activities of September.

The government has settled Rs 15,107 crore to states GST from Integrated GST (IGST) as regular settlement. Further, Rs 15,000 crore has been settled with the states from the balance IGST available with the Centre on provisional basis at the end of October.

Total revenue earned by the state governments after regular and provisional settlement was Rs 52,934 crore in October.

Ten states which are facing maximum revenue shortfall during April-August are Puducherry (42 per cent), Punjab and Himachal Pradesh (36 per cent each), Uttarakhand (35 per cent), Jammu and Kashmir (28 per cent), Chhattisgarh (26 per cent), Goa (25 per cent), Odisha (24 per cent), Karnataka and Bihar (20 per cent).

The states faced an average 16 per cent shortfall in GST mop-up in the first year of implementation (July 2017-March 2018), which has come down to 13 per cent during April-August of the current fiscal.

Finance Secretary Hasmukh Adhia has already held discussions with tax officials in six states — Punjab, Himachal Pradesh, Puducherry, Jammu & Kashmir, Bihar and Uttarakhand — to shore up revenues.

While only six states — Mizoram, Arunachal, Manipur, Nagaland, Sikkim and Andhra Pradesh — are facing revenue surplus in the current fiscal, 25 states are staring at a revenue shortfall and have to be compensated by the Centre.

In 2017-18, the Centre had released Rs 41,147 crore to the states as GST compensation to ensure that the revenue of the states is protected at the level of 14 per cent over the base year tax collection in 2015-16.

Source: Business Today