The Center will provide Rs 35,298 crore in revenue due to the decline in the revenue of the states due to GST

(PTI) New Delhi, Ta. December 16, 2019, Monday

Amidst the displeasure of the states due to delay in payment of GST returns, the government has released Rs 35,298 crore for loss of revenue in the states due to implementation of GST.

It is worth mentioning that when the GST was implemented on July 1, 2017, the States were promised that the Central Government will be compensated for whatever damage they may incur due to the implementation of GST.

The compensation amount is calculated on the basis of 14% of gross receipts in the year 2016-17. To compensate, cess is levied on tobacco products, cigarettes, aerated water, automobiles and coal besides GST. The compensation amount is paid every two months, but this time the states were angry with the Center for not paying the compensation since August 2019.

The Central Board of Indirect Taxes and Customs (CBIC) said on Twitter that the central government has released Rs 35,298 crore for GST returns to the state and union territories. The announcement was made two days before the GST Council meeting. It is worth mentioning that the next meeting of the GST Council is to be held on December 18 and it is likely that the GST rates will change.

The meeting is likely to raise the issue of delay in payment of GST returns in opposition-ruled states like Punjab, West Bengal and Kerala. Union Finance Minister Nirmala Sitharaman today assured the states that he would not go back on his promise to pay GST compensation.