Release of over Rs 2 lakh cr as GST compensation to States for FY 2020-21

Tags: National Economy/Finance Popular

The Finance Ministry has said that an amount of Rs 2 lakh 78 thousand crore has been released to the states as GST compensation for the financial year 2020-21.

• The ministry has so far released  7 lakh 35 thousand crore rupees to the States including the assistance released on back-to-back basis. 

• Presently only Rs 78 thousand 704 crore compensation for the year 2021-22 is pending due to insufficient amount in the fund, which is equivalent to four months' compensation.

• Normally, compensation for ten months of April to January of any financial year is released during that year and the compensation of February and March is released only in the next financial year. 

• The GST compensation for eight out of the ten months of 2021-22 has already been released to the states and the pending amount will also be released after the cess amount is deposited in the Compensation Fund.

• At the time of the introduction of the Goods and Services Tax, GST, a constitutional amendment provided that Parliament would, by law, provide compensation to the States for the loss of revenue due to the introduction of the GST, for a period of five years.