Lok Sabha Question No. 1284 (UNSTARRED), answered on 2020-09-19
Subject: GST Compensation
Ministry: FINANCE
Asked by: K. Subbarayan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

LOK SABHA UN-STARRED QUESTION NO.1284 TO BE ANSWERED ON SATURDAY, THE 19 TH  SEPTEMBER, 2020 BHADRAPADA 28, 1942 (SAKA)

## GST Compensation

## 1284.  SHRI SUBBARAYAN K.:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  it  is  a  fact  that  the  Government  has  failed  to  pay  the  promised compensation at  a  guaranteed  rate  of  revenue  of  14  per  cent  to  States  for  losses associated with GST implementation risks;
- (b) if so, the amount  due  to  be  paid  by  the  Government  to  various  State Governments;
- (c)  whether it is a fact that most of the State Governments have not agreed for the Centre's proposal to borrow to adjust the amount due; and
- (d) if so, the details thereof along with the reaction of the Government thereto?

## ANSWER MINISTER OF STATE IN MINISTRY OF FINANCE (Shri Anurag Singh Thakur )

(a):As per provisions in Goods and Service Tax (Compensation) Act, 2017 states are assured of their revenue at 14% compounded growth rate over the base year revenue 2015-16 for loss of revenue arising on account of GST implementation for a period of five years. As per Section 7 of the GST (Compensation to States) Act, 2017, the States are required to be compensated for loss of revenue due to implementation of GST from the proceeds of the GST compensation Cess being levied on certain luxury items and demerit goods under Section 8 of the said Act. As per provisions in section 10 (1) of GST (Compensation to state) Act, 2017, GST Compensation cess has been credited into  a  non-lapsable  Fund  known  as  GST  Compensation  Fund  in  Public  Account  of India. Section 10(2) of the said Act, 2017 provides that payment of GST compensation shall be made out of compensation fund. Accordingly, GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to the states. Due to the inadequate  balance  in  the  Compensation  Fund,  the  admissible  bi-monthly  GST compensation for the period April-July, 2020 could not be released so far.

(b):Details of pending GST compensation to states is as per Annexure.

(c) & (d):Some states have objected to the proposed two borrowing options. Central Government continues to remain engaged with the States who have not given either of the options.

****

## Details of GST Compensation

(Rs. in crore)

| S.No   | Nameof State/UT   | Provisional GST Compensation due for FY 2020-21 (Apl - July, 20)   |
|--------|-------------------|--------------------------------------------------------------------|
| (1)    | (2)               | (3)                                                                |
| 1      | Andhra Pradesh    | 4627                                                               |
| 2      | Arunachal Pradesh | 0                                                                  |
| 3      | Assam             | 2149                                                               |
| 4      | Bihar             | 4493                                                               |
| 5      | Chhattisgarh      | 2827                                                               |
| 6      | Delhi             | 6931                                                               |
| 7      | Goa               | 987                                                                |
| 8      | Gujarat           | 11563                                                              |
| 9      | Haryana           | 5841                                                               |
| 10     | Himachal Pradesh  | 1623                                                               |
| 11     | J&K               | 2104                                                               |
| 12     | Jharkhand         | 2475                                                               |
| 13     | Karnataka         | 13763                                                              |
| 14     | Kerala            | 7077                                                               |
| 15     | Madhya Pradesh    | 5863                                                               |
| 16     | Maharashtra       | 22485                                                              |
| 17     | Manipur           | 53                                                                 |
| 18     | Meghalaya         | 255                                                                |
| 19     | Mizoram           | 6                                                                  |
| 20     | Nagaland          | 27                                                                 |
| 21     | Odisha            | 3633                                                               |
| 22     | Puducherry        | 564                                                                |
| 23     | Punjab            | 6959                                                               |
| 24     | Rajasthan         | 6312                                                               |
| 25     | Sikkim            | 69                                                                 |
| 26     | Tamil Nadu        | 11269                                                              |
| 27     | Telangana         | 5424                                                               |
| 28     | Tripura           | 259                                                                |
| 29     | Uttar Pradesh     | 11742                                                              |
| 30     | Uttarakhand       | 2235                                                               |
| 31     | West Bengal       | 7750                                                               |
|        | Total             | 151365.00                                                          |