Central Government Has Released GST Compensation To States

Central Government has released Rs 1 lakh crore in GST compensation to states since October last year.

The Finance Ministry has released Rs 1 lakh crore towards GST compensation to states and union territories since October last year.

The ministry on Friday released the 17th installment of Rs 5,000 crore to 23 states and three union territories (Delhi, Jammu and Kashmir, and Puducherry).

The revenue of the remaining five states Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim has not made any difference in the implementation of the GST regime.

After this latest installment, since October last year, the amount released to the states and union territories has gone up to Rs one lakh crore.

Due to the implementation of GST, the total revenue of the states was estimated to be Rs 1.10 lakh crore in the current financial year.

The Central Government has introduced a special facility to raise debt on behalf of the states to meet this shortfall.

The ministry said that the government has taken a loan of Rs 1 lakh crore through the special loan facility at an average interest rate of 4.83 percent.

Of this, an amount of Rs 91,460.34 crore has been allocated to the states and Rs 8,539.66 crore has been given to the three union territories.

Let us state here that the revenue of the Center and the states declined sharply after March due to the lockdown imposed to prevent the spread of infection of the coronavirus epidemic.

During this time, the GST collection also decreased significantly. In order to compensate for the fall in GST collections in the current financial year, the central government had put two options before the states.

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