Central Government Released 14 Installments of GST Collection for FY 2022-23, FM Nirmala Sitharaman reassures Timely Compensation to States

The response sheds light on the Goods and Services Tax (GST) collection for the financial year 2022-23 and the distribution of shares to key states, including Bihar, Maharashtra, Jharkhand, West Bengal, and Jammu and Kashmir.

The report reveals that a total of 14 installments of devolution to the States were released for the fiscal year 2022-23. The detailed breakdown of the share of GST collection for each state is as follows:

Bihar: ₹26,989.02 Crores

Maharashtra: ₹16,950.64 Crores

Jharkhand: ₹8,873.77 Crores

West Bengal: ₹20,186.74 Crores

Jammu and Kashmir: ₹7,272.22 Crores

Pending Compensation and Current Financial Year Installments:

As per the Constitution (One Hundred and First Amendment) Act, 2016, compensation to states for the loss of revenue due to GST implementation is payable for five years. The report clarifies that the compensation payable to states is provisionally calculated and released every two months, with final calculations for each fiscal year completed after receiving audited revenue figures. The entire provisionally admissible GST compensation for the five-year period ending on June 30, 2022, has already been released. For the current financial year 2023-24, the finalization of compensation figures is underway, with the balance GST compensation released to the states as follows:

Bihar: ₹398.19 Crores (Finalization of provisional compensation for FY 2020-21 & 2021-22)

Maharashtra: ₹0

Jharkhand: ₹165.63 Crores (Finalization of provisional compensation for FY 2017-18 to FY 2021-22)

West Bengal: ₹0

Jammu & Kashmir: ₹0

Additionally, the report mentions that eight installments of devolutions have been released for FY 2023-24 until November 2023.

Optimistic Outlook for States:

The report acknowledges the upward trend in GST collections, indicating a robust performance since the implementation of GST in July 2017. Notably, GST collection reached a record high of ₹1.87 lakh crore in April 2023. With monthly collections consistently surpassing ₹1.50 lakh crore in the current fiscal year, the average gross monthly GST collection stands at ₹1.66 lakh crore, marking an 11% increase compared to the same period in the previous financial year.

The Government of India remains committed to ensuring timely and accurate distribution of GST shares to states. With a positive trajectory in GST collections, there is optimism for states like Bihar, Maharashtra, Jharkhand, West Bengal, and Jammu and Kashmir to receive a higher share, reflecting the improved collection scenario.

The Finance Minister, Smt. Nirmala Sitharaman, has laid out a transparent process for compensation calculations and distribution, providing clarity and assurance to the concerned states.

The Finance Minister further clarified on record that, “GST collection consists of CGST, SGST and IGST. CGST is credited to the Consolidated Fund of India (CFI) while SGST is credited to the Consolidated Fund of respective States.”

It was also stated that, “IGST is being levied and collected by the Centre. The IGST (Domestic + Imports) so collected is apportioned / settled between the Union and the States/UTs on monthly basis, on the basis of place of consumption and cross utilization of ITC (Input Tax Credit) as envisaged under Goods and Services Tax Settlement of Funds Rules, 2017. For the amount of IGST remaining un-apportioned, provisional/advance settlement is done from time to time on an ad-hoc basis between Centre and States/UTs in the ratio of 50:50 and among the States on the basis of monthly revenue to be protected during that Financial Year.”

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