The GST Council convened for the first time today since the government unveiled its budget for 2023, chaired by the Finance Minister Nirmala Sitaraman. One of the key decisions of the council meeting is to clear the entire balance of the GST Compensations due to State Governments.
Government of India has decided to clear the entire pending balance GST compensation of Rs. 16,982 crore for June 2022. Since, there is no amount in the GST compensation Fund, Centre decided to release this amount from its own resources and the same will be recouped from the future compensation cess collection.
With this release, Centre clarified that the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act, 2017 will be cleared.
In addition, Centre also clarified that the admissible final GST compensation to those States who have provided the revenue figures as certified by the Accountant General of the States amounting to Rs. 16,524 crore.
The compensation due for June 2022 for each state (in Rupees) is as follows:
1. Andhra Pradesh 689 Crores
2. Bihar 92 Crores
3. Chhattisgarh 505 Crores
4. Delhi 1212 Crores
5. Goa 120 Crores
6. Gujarat 865 Crores
7. Haryana 629 Crores
8. Himachal Pradesh 229 Crores
9. Jammu and Kashmir 210 Crores
10. Jharkhand 342 Crores
11. Karnataka 1934 Crores
12. Kerala 780 Crores
13. Madhya Pradesh 730 Crores
14. Maharashtra 2102 Crores
15. Odisha 529 Crores
16. Puducherry 73 Crores
17. Punjab 995 Crores
18. Rajasthan 815 Crores
19. Tamil Nadu 1201 Crores
20. Telangana 548 Crores
21. Uttar Pradesh 1215 Crores
22. Uttarakhand 345 Crores
23. West Bengal 823 Crores
Amounting to Rs. 16,982 Crores, in total.
The GST regime was implemented in India from July 1, 2017. As part of the agreement to implement GST, the central government promised to compensate the states for any revenue losses they incur during the first five years of the GST regime.
The compensation is paid to the states on a bi-monthly basis. The compensation is calculated based on the difference between the actual revenue earned by a state through GST and the revenue that the state would have earned if it had continued with the pre-GST indirect tax regime.
The compensation is funded through the GST Compensation Cess, which is levied on certain luxury and sin goods such as tobacco, coal, and motor vehicles.
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