New Delhi: In violation of the provisions of the GST Compensation Law, the Union government has not paid almost Rs 48,000 crores to state governments for the October-January period in the last fiscal to compensate them for the loss of revenue that they incurred during the four months.
Under the GST Compensation Law, the States that do not record a compound annual growth of 14% in their revenue collection following the implementation of GST in July 2017, are legally entitled to be fully compensated by the Centre for a period of five years. The quantum of compensation for each State is calculated month-wise by taking into account their revenue collection in the respective month of FY 2015-16 by taking it as the base year.
“For the October-November period there is an outstanding amount of over Rs 14,000 crore which is to be paid to States under the GST Compensation Law,” said a source in the ministry of finance.
“The unpaid amount of GST Compensation Dues to States for the December-January period stands at around Rs 34,000 crores,” the source told ETV Bharat.
The outstanding amount of nearly Rs 48,000 crore pertains to the October-November and December January period.
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As per the provisions of the section 7 (2) of the GST (Compensation to States) Act of 2017, the compensation amount is provisionally calculated and released to States at the end of every two-month period. The final compensation amount for a financial year is calculated after the receipt of final revenue figures, as audited by the Comptroller and Auditor-General of India (CAG).
Bi-monthly settlement means that for any shortfall in revenue collection by a State in the first two months (April-May) of a fiscal, the Centre must pay the deficit amount to the state in the next month, the month of June in this case and so on.