Source: Business Standard, Dec 17, 2019
New Delhi: Ahead of the GST Council meeting on Wednesday, the Centre on Monday sought to soothe the frayed nerves of states by releasing over Rs 35,000 crore as pending compensation. “The central government has released GST compensation of Rs 35,298 crore to states and union territories today (Monday),” the Central Board of Indirect Taxes and Customs (CBIC) said in a tweet.
This is likely to give a positive signal to states for the upcoming meeting, which may take up various options to raise funds to compensate states. Earlier in the day, Union Finance Minister Nirmala Sitharaman assured states that the Centre would not “renege” on the promise of GST compensation.
There was, however, some confusion over the period for which the compensation amount was released. States said with this payment they got compensation dues till September.
“Compensation has been released to the states for the months of August and September. We are hopeful that compensation for October and November will be released by the end of the month,” Bihar Deputy Chief Minister Sushil Modi told Business Standard.
Earlier, Parliament’s Standing Committee on Finance had said the Centre had paid Rs 45,745 crore as compensation to states for the first four months of the current financial year. The dues were paid in June and August. However, according to Sitharaman’s statement in the Rajya Sabha, the Centre had released compensation of Rs 65,250 crore till October this year.
This, she said, was Rs 9,783 crore more than what the Centre collected through the compensation cess — Rs 55,467 crore as of October 31 this year. Even BJP-ruled states raised eyebrows over Sitharaman’s response to the compensation cess issue.Read the rest of this entry »