₹1.51 lakh crore GST compensation due to States, Maharashtra leadsby PTI
The GST collection during April-August declined on account of COVID-19 induced lockdown, and the compensation due to states stands at over ₹1.51 lakh crore, Minister of State for Finance Anurag Singh Thakur said on Monday.
The provisional GST compensation due to states/UTs for 2020-21 was highest for Maharashtra at ₹22,485 crore, followed by Karnataka (₹13,763 crore), Uttar Pradesh (₹11,742 crore), Gujarat (₹11,563 crore) and Tamil Nadu (₹11,269 crore).
The compensation due to West Bengal stands at ₹7,750 crore, Kerala (₹7,077 crore), Punjab (₹6,959 crore), Delhi (₹6,931 crore), Rajasthan (₹6,312 crore), Telangana (₹5,424 crore) and Chhattisgarh (₹2,827 crore).
The total provisional GST compensation due to 31 states and UTs for 2020-21 put together stands at ₹1,51,365 crore, as per data shared in a written reply to a question in the Lok Sabha.
Mr. Thakur said the issue of pending compensation and future course of action to meet the shortfall was discussed in the 41st GST Council meeting on August 27 wherein states were given two options to meet their GST compensation shortfall for current fiscal year from market borrowing.
“It was also decided that states will give their preference views thereon. Thereafter on finalisation of scheme, states can choose either Option 1 or Option 2 and accordingly, their compensation, borrowing, repayment etc will be dealt as per their individual choice,” he added.
In the current fiscal year, states are staring at a staggering ₹2.35 lakh crore Goods and Services Tax (GST) revenue shortfall.
Of this, as per the Centre’s calculation, about ₹97,000 crore is on account of GST implementation and the rest ₹1.38 lakh crore is due to the impact of COVID-19 on states’ revenues.
The Centre late last month gave two options to states to borrow either ₹97,000 crore from a special window facilitated by the RBI or ₹2.35 lakh crore from market and also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing.
In reply to a separate question, Mr. Thakur said the total net GST target for the Centre has been pegged at ₹6,90,500 crore for 2020-21 in the Union Budget.
The actual net GST collection for the Centre till August 2020 is Rs 1,81,050 crore, which shows 26.2 per cent of the Budget Estimates (BE).
“The BEs for FY 2020-21 of GST in the Union Budget, 2020-21 were projected on the basis of assumption of higher growth of GDP, however as per CSO, MoS&PI... the Nominal GDP for Q1 (April-June), 2020-21 shows a contraction of 22.6 per cent which is one of the major reasons for revenue shortfall in GST.
“Other reasons for low tax collection inter-alia include nationwide lockdown measures implemented since March 2020 consequent to global COVID-19 pandemic which led to limited economic activities, extension of GST return filings timelines without payment of interest, late fee or penalty etc,” Mr. Thakur said.