Centre Releases Rs.36,400 Crore as GST Compensation to States

The much-delayed compensation comes at a time when state finances are under severe stress due to the Covid-19 lockdown.

Centre Releases Rs.36,400 Crore as GST Compensation to States

Taking stock of the current situation due to COVID-19 where State Governments need to undertake expenditure while their resources are adversely hit, the Central Government has released the GST Compensation of Rs.36,400 crore to the States/UTs with Legislature for the period from December, 2019 to February, 2020 today.



The  GST Compensation of Rs.1,15,096 crore for period April-November, 2019 had already been released by the Central Government to the States/ UTs with Legislature. Since the end of August 2019, the Centre has been in a precarious position while paying GST compensation to the States and UTs with legislative assemblies. On an average, the monthly GST compensation cess requirement was to the tune of ₹14,000 crore while the cess collection on an average was only ₹7,000-₹8,000 crore per month. Therefore, the only options left for the GST Council are to either bring more items under the cess base or to increase cess rate on the existing items.




Also Read: GST Compliance calendar for June 2020

Meanwhile, as business activities came to a virtual standstill in April, owing to the COVID-19 led lockdown, GST collections for the month took a dip. GST collections for April reportedly stood around Rs 43,000 crore,reported by moneycontrol.

About CA Junction

Check Also

ICSI re-opens Window for Change of Exam Centres / Module / Medium for June 2020 exams

ICSI re-opens Window for Change of Exam Centres / Module / Medium for June 2020 exams

The Institute of Company Secretaries of India (ICSI) on Wednesday has re-opened the online facility …

Leave a Reply

Your email address will not be published. Required fields are marked *