Centre releases Rs 17,000 crore to states as GST compensation

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November 04, 2021 3:15 AM

“The sum total of Rs 2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY 2021-22,” the finance ministry had said in a statement recently.

As per the decision of GST Council, back-to-back loan of Rs 1.59 lakh crore has already been released in lieu of shortfall in release of GST compensation during the current financial year.As per the decision of GST Council, back-to-back loan of Rs 1.59 lakh crore has already been released in lieu of shortfall in release of GST compensation during the current financial year.

The central government has released goods and service tax (GST) compensation of Rs 17,000 crore to states on Wednesday out of the designated cess kitty, taking the total amount of compensation released to the states under this mechanism so far in FY22 to Rs 60,000 crore.

As per the decision of GST Council, back-to-back loan of Rs 1.59 lakh crore has already been released in lieu of shortfall in release of GST compensation during the current financial year.

The amount of Rs 1.59 lakh crore provided to states this fiscal as back-to-back loans was would be over and above the compensation of Rs 1 lakh crore based on cess collection to be released to states during FY22.

“The sum total of Rs 2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY 2021-22,” the finance ministry had said in a statement recently.

If the shortfall is less than the estimated Rs 2.59 lakh crore, a portion of the previous year’s arrears would be cleared in FY22.

While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore, the Centre had acknowledged in Parliament that an amount of Rs 81,179 crore was yet to be released to the state governments towards fully compensating them for their GST revenue shortfall for FY21.

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