Lok Sabha Question No. 1338 (UNSTARRED), answered on 2021-12-06
Subject: GST Compensation Dues
Ministry: FINANCE
Asked by: Nusrat Jahan Ruhi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA

## UNSTARRED QUESTION NO-1338 ANSWERED ON-06/12/2021

## GST COMPENSATION DUES

## 1338. SHRIMATI NUSRAT JAHAN RUHI:

Will the Minister of FINANCE be pleased to state:

- (a) the amount of Goods and Services Tax (GST) Compensation due to State/UTs for the year 2020-2021, State/UT-wise especially West Bengal; and
- (b) the time by which the Government is contemplating to clear the dues of the States/UTs?

## ANSWER

## MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (b):  As per provisions of GST (Compensation to States) Act, 2017, GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to all the states including West Bengal.  However,  the  economic  impact  of  the  pandemic  has  led to  higher  compensation requirement  due  to  lower  GST  collection  and  at  the  same  time  lower  collection  of  GST compensation  cess.  GST  compensation  of  Rs.  6128  crore  has  been  released  to  West  Bengal  to partly meet the compensation payable for the period April'20 to March'21 as the amount in GST Compensation Fund was not adequate to meet the full compensation requirement.

The issue of GST Compensation to States has been deliberated in the 41st and 42nd GST Council  meetings.  Accordingly,  in  FY  20-21,  Centre  had  borrowed  Rs.  1.1  lakh  crore  under  a special  window  and  passed  on  to  the  States  as  back-to-back  loan  to  help  the  States  to  meet  the resource  gap  due  to  short-release  of  compensation  on  account  of  inadequate  balance  in  the Compensation  Fund.  This  arrangement  has  been  finalized  after  detailed  deliberations  with  the States  and  all  States  have  opted  for  this  arrangement.  The  quantum  of  funds  released  to  West Bengal as back to back loan was Rs. 4431 crore for FY 2020-21.  In addition, depending on the amount  available  in  the  Compensation  Fund,  Centre  has  also  been  releasing  the  regular  GST compensation  to  States  to  make  up  for  GST  revenue  shortfall.  Taking  into  account,  the  GST compensation released from Compensation Fund as well as back-to-back loan released in FY 202021, GST compensation of ₹1699 crore is pending to West Bengal for period April'20 to March'21 as per provisional figures. Centre is committed to release full GST Compensation to the States/UTs as per GST (Compensation to States) Act, 2017 for the transition period by extending the levy of Compensation cess beyond 5 years to meet the GST revenue shortfall as well as servicing the loan borrowed through  special  window  scheme.  The  detail  of  GST  compensation  due  to  States/  UTs including West Bengal for FY 2020-21 is as per Annexure. Subsequent to deliberations in the 43rd GST Council meeting, Centre has borrowed Rs. 1.59 lakh crores from the market through special window in current FY and passed it to the States/ UTs as a back-to-back loan as was done in last year.  Release  of  this  amount  has  been  front  loaded  during  the  financial  year  to  enable  the States/UTs to undertake capital expenditure.

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| S. No.   | Name of State/UT   | Provisional GST compensation yet to be released for FY 2020-21   |
|----------|--------------------|------------------------------------------------------------------|
| (1)      | (2)                | (3)                                                              |
| 1        | Andhra Pradesh     | 1195                                                             |
| 2        | Arunachal Pradesh  | 0                                                                |
| 3        | Assam              | 351                                                              |
| 4        | Bihar              | 754                                                              |
| 5        | Chhattisgarh       | 309                                                              |
| 6        | Delhi              | 2543                                                             |
| 7        | Goa                | 360                                                              |
| 8        | Gujarat            | 3145                                                             |
| 9        | Haryana            | 1141                                                             |
| 10       | Himachal Pradesh   | 391                                                              |
| 11       | J&K                | 371                                                              |
| 12       | Jharkhand          | 582                                                              |
| 13       | Karnataka          | 3528                                                             |
| 14       | Kerala             | 1484                                                             |
| 15       | Madhya Pradesh     | 1194                                                             |
| 16       | Maharashtra        | 6723                                                             |
| 17       | Manipur            | 0                                                                |
| 18       | Meghalaya          | 61                                                               |
| 19       | Mizoram            | 0                                                                |
| 20       | Nagaland           | 0                                                                |
| 21       | Odisha             | 630                                                              |
| 22       | Puducherry         | 134                                                              |
| 23       | Punjab             | 1838                                                             |
| 24       | Rajasthan          | 1439                                                             |
| 25       | Sikkim             | 1                                                                |
| 26       | Tamil Nadu         | 2894                                                             |
| 27       | Telangana          | 615                                                              |
| 28       | Tripura            | 37                                                               |
| 29       | Uttar Pradesh      | 3120                                                             |
| 30       | Uttarakhand        | 595                                                              |
| 31       | West Bengal        | 1699                                                             |
|          | Total              | 37134                                                            |

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