Rs. 543 crores released to AP under GST compensation, says Union Minister Pankaj Chaudhary

The Union Minister of state for finance Pankaj Chaudhary said that Rs 17,000 crore was released to the states on November 3 under GST compensation, of which Rs 543 crore was given under Andhra Pradesh's share. In the Rajya Sabha on Tuesday, the Minister replied in writing to a question asked by Vijayasai Reddy. He said this is in addition to the Rs 1,13,464 crore released to the states under GST compensation between April 20 and March 21.

He said that since the enactment of the GST Act in 2017, the amounts due under GST compensation to the respective states for the financial years 2017-18, 2018-19, and 2019-20 have been fully released. The minister said GST collections have come down significantly in the wake of the corona epidemic boom. However, the share of GST compensation to be paid to the states has increased. But he said there was not enough funding in the GST Compensation Fund to make payments to that extent.

The minister said Rs 1,010,000 crore and Rs 1,55,000 crore were released to the states in the financial years 2020-21 and 2021-22 after repeated discussions in the GST Council on the huge deficit in GST collection and arrears to be paid to the states. He said the Centre was regularly releasing GST compensation to the states to bury the shortfall in GST revenue.

Despite releasing funds to the states in the form of loans apart from the GST Compensation Fund, the Center still owes Rs 51,798 crore under the GST Compensation for the financial years 2020-21 and 2021-22, the minister said. He said the GST Act has been incorporated to cover the deficit in state tax revenue for up to 14 percent per annum under GST compensation for five years from the date of implementation of GST.