With states not being paid compensation for loss of revenue from implementation of GST since August, Finance Minister Nirmala Sitharaman on Thursday assured the Centre will honour its commitment but did not say by when the dues will be cleared.
States — that surrendered powers to collect taxes on goods and services after local levies got subsumed into the Goods and Services Tax (GST) from July 1, 2017 — was through legislation guaranteed to be paid for
any loss of revenue in the first five years of GST implementation.
This monthly compensation was to be paid within two months but states haven’t received any such amount since August 2019.
During the debate in the Rajya Sabha on the bill seeking Parliamentary nod for additional or supplementary spending in the current fiscal, Congress, Left and TMC raised the issue of non-payment of the GST compensation and
sought to know when it will be paid.
The Finance Minister said the Centre was committed to discharging its obligation and asserted that “no one should have any doubt”.
She said the compensation is paid to the states out of cess levied on five products. The compensation is paid keeping 2015-16 revenues of the states as the base and guaranteeing 14 per cent addition on top of it every year.