The Minister of State for Finance Anurag Singh Thakur said on Monday the GST collection during April-August declined on account of COVID-19 induced lockdown, and the compensation due to states stands at over Rs 1.51 lakh crore.
The provisional GST compensation due to states/UTs for 2020-21 was highest for Maharashtra at Rs.22,485 crore, followed by Karnataka at Rs.13,763 crore, Uttar Pradesh at Rs.11,742 crore, Gujarat at Rs.11,563 crore and Tamil Nadu at Rs.11,269 crore.
The Ministry said that the Nominal GDP for Q1 (April-June), 2020-21 shows a contraction of 22.6% 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, an extension of GST return filings timelines without payment of interest, late fee or penalty etc,” the Minister of State for Finance, Anurag Singh Thakur relied.
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 the current fiscal year from market borrowing.
“It was also decided that states will give their preference views thereon. Thereafter on finalisation of the 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 while reply to the questions raised by various on GST shortfall.
As per provisions in Section 7 of the GST (Compensation to States) Act, 2017 loss of revenue to the States shall be calculated and released at the end of every two months’ period, for 5 years.
Accordingly, admissible GST compensation for the period April 2019 to March 2020 has been released to all States/ UTs including Tamil Nadu. Due to short GST Compensation Cess collection in the current financial year, GST compensation is yet to be paid for the period April-July, 2020.
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).Subscribe Taxscan AdFree to view the Judgment