Centre releases Rs 35,298 cr GST compensation to states; govt will not renege on promise, says Nirmala Sitharaman

Two days ahead of the GST Council meeting, the Centre released GST compensation of Rs 35,298 crore to states and Union Territories on Monday after drawing flak from the Opposition-ruled states for the delay.

The Central Government has released GST compensation of Rs. 35,298 Crores to States and Union Territories today. @nsitharamanoffc @nsitharaman @ianuragthakur @FinMinIndia

— CBIC (@cbic_india) December 16, 2019

The Central government has released Goods and Services Tax (GST) compensation of Rs 35,298 crores to states and Union Territories on Monday, the Central Board of Indirect Taxes and Customs (CBIC) stated in a tweet. Meanwhile, Union Finance minister Nirmala Sitharaman on Monday assured states that the Centre will not “renege” on the promise of GST compensations, reported PTI. The delays to pass on the money are due to a slip in collections and the states have nothing to be embarrassed about, she said. [caption id=“attachment_6013191” align=“alignleft” width=“380”] Representational image. Reuters[/caption] The remarks come at a time when states like Maharashtra and Kerala have been demanding compensation sooner. The opposition-ruled states had threatened to move the Supreme Court for non-payment of their dues, which they said was their constitutional right. “It is certainly their right, I am not denying. At the same time, I am also making clear to say that I am not reneging on that. States will be given. We are certainly not reneging on it. “I admit that the payments which had to go the compensation head have not been given for two months slot,” Sitharaman said, addressing the Times Network’s India Economic Conclave through video conferencing. The GST Council, the highest decision-making body for indirect tax, is slated to hold its meeting on 18 December. “I do not want them (states) to feel embarrassed because it’s not their fault nor is it personally my fault,” she said, admitting that the GST collections have been much lower than expectations. She attributed the dip in collections to a slip in GST filing due to natural calamities and also due to a slowdown in consumption that has a direct impact on the collections. “I am working with the states. Each of them has taken a lot of effort from their end to improve the GST collection. I guess with their efforts and the Centre and revenue department officials…the prospects of improving GST collection is likely to go up,” she said. When asked about reports of cuts in GST rates, Sitharaman said there is no such call to review. “I don’t think, I am even talking about raising or rationalising the slabs at all at this stage. But eventually at some time the GST Council would want to talk about it, but I am not readying myself for this particular meeting on this particular issue,” she said. On 4 December, Sitharaman had assured eight states , which are yet to receive the GST compensation from the Centre since August this year, that they would get their respective dues as early as possible. She had said this after finance ministers and representatives of the opposition-ruled states including Kerala, Puducherry, Rajasthan, Punjab, Madhya Pradesh, Chhattisgarh and Delhi met her and expressed their concern over the delay in releasing the GST compensation which has put them in an acute financial crisis. Last month, five opposition-ruled states had expressed concern over the delay in the release of GST compensation amid acute financial crisis in those states. Accordingly, Kerala’s GST compensation due was Rs 1,600 crore, Delhi’s due stood at Rs 2,355 crore and Punjab was to receive Rs 4,100 crore while West Bengal’s pending GST compensation amount was Rs 1,500 crore. — With PTI inputs