Bhubaneswar: With the revenue collection of the state having plunged drastically due to Covid-19 pandemic, the government is eagerly awaiting Rs 4,200 crore compensation from the Centre under the Goods and Services Tax (GST).
The Centre is supposed to compensate states for their loss of revenue after implementation of the GST Act. Under the law, if the states’ GST revenues do not grow by at least 14 per cent over the base year (2014-15), the Centre will pay them the difference amount on a bi-monthly basis for the first five years from the implementation of the GST Act.
The state government has estimated compensation of Rs 3,647 crore for the first fourth months of the current financial year 2020-21. The dues for the first two months were Rs 2,443 crore that increased to Rs 3,674 crore by the end of July. However, the Centre has not released a single pie as GST compensation for 2020-21 fiscal, official sources said.
Apart from Rs 3,674 crore pending as on date for this year, the Centre is yet to clear dues of previous financial years. The ministry of finance has not cleared about Rs 230 crore for the financial year 2019-20 and Rs 450 crore for the year 2018-19, the source said. The total dues pending with the Centre add up to over Rs 4,200 crore.
“As the revenue collection has gone drastically in our state. We will soon write to the Centre again seeking early release of the GST compensations,” said an official of the finance department.
The state GST collection in July 2020 increased to Rs 794.02 crore as against Rs 702.44 crore achieved in the corresponding month last year. The GST collections for April, May and June dropped by 61.15%, 25.22% & 5.83% respectively.
As per reports, the Union finance ministry is not in a position to clear all GST compensations as per current revenue sharing formula due to a fall in tax collection. The gross Goods and Services Tax revenue of India slid by 14 per cent last month to Rs 87,422 crore from Rs 1,02,083 crore collected in July 2019, as per data released by the finance ministry.
During last GST Council meeting in June, Finance Minister Niranjan Pujari had demanded that the Centre released the compensations as soon as possible as the state government was facing a fund crunch due to the effect of the pandemic.
The collection from one of the non-GST items – petroleum products, is also showing encouraging trends during July. The collection of July 2020 against this item increased to Rs 521.47 crore from Rs 509.03 crore collected in July 2019 registering a growth rate of 2.5%.