Lok Sabha Question No. 212 (UNSTARRED), answered on 2020-09-14
Subject: GST Shortfall
Ministry: FINANCE
Asked by: S. Jothimani

212. MS. S. JOTHIMANI:

Will the Minister of FINANCE be pleased to state:

- (a) the details of reasons for revenue shortfall in the Goods and Services Tax (GST);
- (b) the details of options available to the States like Tamil Nadu to meet the revenue shortfall in GST collections and the objections from the States for the options;
- (c) the measures which have been taken by the Government for fulfilling its moral and legal obligation to pay the compensation for the shortfall in GST collections to the States;
- (d) the State-wise details of amounts disbursed under GST compensation as of date;
- (e) whether the GST cess will be extended beyond 2022 and if so, the reasons therefor; and
- (f) the details of decline in GST revenue, State-wise including Tamil Nadu and the reasons therefor?

## ANSWER THE MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) & (f) Total net GST target (for centre, as per receipt budget document) has been pegged at Rs. 6,90,500 crore for 2020-21 in the general Union Budget, 2020-21. The actual net GST collection  for  the  centre  till  August,  2020  is  Rs.  1,81,050  crore,  which  shows  26.2% achievement (till August, 2020) of BE 2020-21 (the details enclosed at annexure-I ).

The  BE  estimates  for  FY  2020-21  of  GST  in  the  Union  Budget,  2020-21  were projected on the basis of assumption of higher growth of GDP, however as per CSO, MoS&PI press release [on 31 st August, 2020], the Nominal GDP for Q1 (April-June), 2020-21 shows a contraction of 22.6% which is one of the major reason 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, extension of GST return filings timelines without payment of interest, late fee or penalty etc.

- (b) & (c): 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.

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF REVENUE

## LOK SABHA

## UNSTARRED QUESTION NO- 212

TO BE ANSWERED ON MONDAY, 14 th  SEPTEMBER, 2020/BHADRAPADA 23, 1942 (SAKA)

## GST Shortfall

Accordingly, issue of pending GST compensation and future course of action to meet the  GST  compensation  shortfall  has  been  discussed  in  41 st GST  Council  meeting  on 27.08.2020 wherein States were given two options to meet their GST compensation shortfall for  current  FY  from  market  borrowing.  It  was  also  decided  that  States  will  give  their preference views thereon. Thereafter on finalization of scheme, the states can choose either Option 1 or Option 2 and accordingly, their compensation, borrowing, repayment etc. will be dealt as per their individual choice. The Chief Minister of Tamil Nadu vide his letter dated 31.8.2020 had requested the Hon'ble Prime Minister that Government of India can raise the required funds as a loan and lends it to the GST compensation fund against future cess receipts, so that the GST compensation can be paid in full to the States in 2020-21.

- (d) State wise detail of GST compensation disbursed is as per Annexure II .
- (e) Section 18 of Constitution (One Hundred and First Amendment) Act, 2016 provides for payment of GST compensation to the states, on the recommendation of the GST Council, for loss of revenue arising on account of implementation of GST for a period of five years.
- (f) The details of decline in GST revenue (domestic) State-wise are as per Annexure-III *****

GST Collection since inception

ANNEXURE I

(Rs. In crore)

| Tax Head              | 2017-18               | 2017-18   | 2018-19               | 2018-19   | 2019-20               | 2019-20   | 2020-21              | 2020-21                             |
|-----------------------|-----------------------|-----------|-----------------------|-----------|-----------------------|-----------|----------------------|-------------------------------------|
| Tax Head              | Revised Estimate (RE) | Actual    | Revised Estimate (RE) | Actual    | Revised Estimate (RE) | Actual    | Budget Estimate (BE) | Actual[April- August] (Provisional) |
| CGST                  | 221400                | 203261    | 503900                | 457534    | 514000                | 494070    | 580000               | 125308                              |
| IGST                  | 161900                | 176688    | 50000                 | 28945     | -                     | 9204      | -                    | 27580                               |
| GST Compensation Cess | 61331                 | 62612     | 90000                 | 95081     | 98327                 | 95551     | 110500               | 28163                               |
| Net Collection        | 444631                | 442561    | 643900                | 581559    | 612327                | 598825    | 690500               | 181051                              |

Source: Receipts Budget, PrCCA, CBIC

## Details of GST Compensation

|       |                   | GST Compensation released in   | GST Compensation released in   | GST Compensation released in   | GST Compensation released in   | GST Compensation released in   |
|-------|-------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| S.No  | Nameof State/UT   | FY 2017- 18                    | FY 2018- 19                    | FY 2019- 20                    | FY 2020- 21                    | Total                          |
| (1)   | (2)               | (3)                            | (4)                            | (5)                            | (6)                            | (7)                            |
| 1     | Andhra Pradesh    | 382                            | 0                              | 1840.76                        | 1187                           | 3410                           |
| 2     | Arunachal Pradesh | 15                             | 0                              | 0.00                           | 0                              | 15                             |
| 3     | Assam             | 886                            | 466                            | 878.97                         | 488                            | 2719                           |
| 4     | Bihar             | 3041                           | 2571                           | 3524.78                        | 2265                           | 11402                          |
| 5     | Chattisgarh       | 1483                           | 2261                           | 3081.44                        | 1877                           | 8702                           |
| 6     | Delhi             | 157                            | 4182                           | 7436.00                        | 2160                           | 13935                          |
| 7     | Goa               | 252                            | 476                            | 818.70                         | 329                            | 1876                           |
| 8     | Gujarat           | 3687                           | 6149                           | 10646.52                       | 5822                           | 26305                          |
| 9     | Haryana           | 1199                           | 2820                           | 5453.43                        | 2522                           | 11994                          |
| 10    | Himachal Pradesh  | 539                            | 2037                           | 1877.33                        | 1018                           | 5471                           |
| 11    | J&K               | 1137                           | 1462                           | 2279.28                        | 1230                           | 6108                           |
| 12    | Jharkhand         | 1265                           | 1029                           | 1531.82                        | 859                            | 4685                           |
| 13    | Karnataka         | 6246                           | 10754                          | 14496.90                       | 7266                           | 38763                          |
| 14    | Kerala            | 1772                           | 2884                           | 5575.04                        | 3514                           | 13745                          |
| 15    | Madhya Pradesh    | 2511                           | 2866                           | 4530.78                        | 2600                           | 12508                          |
| 16    | Maharashtra       | 1488                           | 8330                           | 15018.13                       | 6837                           | 31673                          |
| 17    | Manipur           | 24                             | 0                              | 0.00                           | 0                              | 24                             |
| 18    | Meghalaya         | 124                            | 73                             | 101.45                         | 65                             | 363                            |
| 19    | Mizoram           | 0                              | 0                              | 0.00                           | 0                              | 0                              |
| 20    | Nagaland          | 0                              | 0                              | 0.00                           | 0                              | 0                              |
| 21    | Odisha            | 2019                           | 3390                           | 3928.78                        | 1917                           | 11255                          |
| 22    | Puducherry        | 333                            | 592                            | 862.29                         | 338                            | 2125                           |
| 23    | Punjab            | 4037                           | 7129                           | 8804.54                        | 6310                           | 26281                          |
| 24    | Rajasthan         | 2598                           | 2176                           | 4439.53                        | 2675                           | 11889                          |
| 25    | Sikkim            | 6                              | 0                              | 0.00                           | 0                              | 6                              |
| 26    | Tamil Nadu        | 632                            | 3151                           | 8922.03                        | 5442                           | 18147                          |
| 27    | Telangana         | 169                            | 0                              | 2263.16                        | 791                            | 3223                           |
| 28    | Tripura           | 129                            | 155                            | 171.00                         | 159                            | 614                            |
| 29    | Uttar Pradesh     | 2124                           | 308                            | 5179.52                        | 3943                           | 11555                          |
| 30    | Uttarakhand       | 1283                           | 2037                           | 2477.38                        | 1452                           | 7249                           |
| 31    | West Bengal       | 1608                           | 1977                           | 4358.74                        | 2479                           | 10423                          |
| Total |                   | 41146.00                       | 69275.00                       | 120498.29                      | 65546.20                       | 296465.49                      |

(Rs. in crore)

GST revenue, State-wise April-Aug 2020-21 YoY

| State Code   | State/UT                    | 2019-20   |   2020-21 | Decline in%   |
|--------------|-----------------------------|-----------|-----------|---------------|
| 1            | Jammu and Kashmir           | 1680      |      1169 | -30.5         |
| 2            | Himachal Pradesh            | 3390      |      2219 | -34.5         |
| 3            | Punjab                      | 6497      |      4580 | -29.5         |
| 4            | Chandigarh                  | 821       |       578 | -29.5         |
| 5            | Uttarakhand                 | 6327      |      3760 | -40.6         |
| 6            | Haryana                     | 23975     |     15869 | -33.8         |
| 7            | Delhi                       | 18524     |     11907 | -35.7         |
| 8            | Rajasthan                   | 13576     |     10066 | -25.9         |
| 9            | Uttar Pradesh               | 27170     |     19563 | -28.0         |
| 10           | Bihar                       | 5294      |      4081 | -22.9         |
| 11           | Sikkim                      | 916       |       855 | -6.7          |
| 12           | Arunachal Pradesh           | 235       |       199 | -15.4         |
| 13           | Nagaland                    | 122       |       136 | 11.5          |
| 14           | Manipur                     | 162       |       120 | -25.8         |
| 15           | Mizoram                     | 128       |        72 | -43.6         |
| 16           | Tripura                     | 276       |       270 | -2.1          |
| 17           | Meghalaya                   | 645       |       459 | -28.9         |
| 18           | Assam                       | 4062      |      3171 | -21.9         |
| 19           | West Bengal                 | 18389     |     11781 | -35.9         |
| 20           | Jharkhand                   | 10091     |      5967 | -40.9         |
| 21           | Odisha                      | 13011     |      9889 | -24.0         |
| 22           | Chhattisgarh                | 10266     |      8549 | -16.7         |
| 23           | Madhya Pradesh              | 11626     |      9041 | -22.2         |
| 24           | Gujarat                     | 32503     |     22049 | -32.2         |
| 25           | Daman and Diu               | 483       |       270 | -44.0         |
| 26           | Dadra and Nagar Haveli      | 777       |       482 | -38.0         |
| 27           | Maharashtra                 | 75910     |     52154 | -31.3         |
| 29           | Karnataka                   | 34362     |     24763 | -27.9         |
| 30           | Goa                         | 1788      |      1012 | -43.4         |
| 31           | Lakshadweep                 | 7         |         6 | -17.7         |
| 32           | Kerala                      | 7861      |      5220 | -33.6         |
| 33           | Tamil Nadu                  | 30528     |     19797 | -35.2         |
| 34           | Puducherry                  | 758       |       544 | -28.2         |
| 35           | Andaman and Nicobar Islands | 151       |       103 | -31.5         |
| 36           | Telangana                   | 15949     |     11762 | -26.3         |
| 37           | Andhra Pradesh              | 11187     |      8237 | -26.4         |
| 38           | Ladakh                      |           |        35 | -             |
| 97           | Other Territory             | 807       |       617 | -23.5         |
| 99           | Center Jurisdiction         | 399       |       629 | 57.6          |
| Grand Total  | Grand Total                 | 390650    |    271979 | -30.4         |