The State Government is yet to receive over Rs 2,739 crore as part of GST compensation from the Government of India.
According to a statement by State Finance Minister Niranjan Pujari in the Legislative Assembly recently, the Centre is yet to release GST companion of Rs 1,167.50 crore due for the financial year 2021-22 and Rs 1,571.83 crore for the first two months of the current fiscal.
As per the provisions of GST (Compensation to States) Act, 2017, if the States’ GST revenue does not grow by at least 14% over the base year (2015-16), the Centre has to pay the shortfall amount on a bimonthly basis for the first five years of implementing the Act. The Union Government has introduced the Goods and Services Tax (GST) since July 1, 2017.
The Centre released GST compensation of Rs 2,348.08 crore to Odisha in 2017-18 against the protected revenue of Rs 10,769.79 crore, Pujari said.
Similarly, he said, Rs 4,241.08 crore was sanctioned in 2018-19 against the protected revenue of Rs 16,370.08 crore while Rs 5,331.91 crore was released by the Centre during 2019-20 as GST compensation. The protected revenue was estimated at Rs 18,661.89 crore in 2019-20.
Due to Covid-19, the Centre sanctioned partial compensation of Rs 4,243.42 crore against the protected revenue of Rs 21,274.55 crore in 2020-21. Moreover, it also released Rs 3,822 crore to the Odisha Government as a back-to-back loan to meet the GST revenue shortfall. In total, the State received Rs 8,065.42 crore in 2020-21.
The protected revenue for the year 2021-22 was estimated at Rs 24,252.99 crore, of which the Centre has provided Rs 6,430.20 crore as back-to-back loan and the State Government has been demanding release of the balance Rs 1,167.50 crore, said Pujari.
For the current financial year of 202-23, the protected revenue is estimated at Rs 27,648.42 crore, of which Rs 4,608.07 crore has been earmarked for the first two months. Accordingly, the revenue shortfall for the first two months of the current FY is estimated at Rs 1,571.83 crore, which is due till date, informed the Minister.
As per the GST Act, the compensation should be paid till June-end. However, the State Government has been demanding that the Centre extend the compensation period for another five years.
During the 47th meeting of the GST Council held in June this year at Chandigarh, Pujari raised the issue of GST compensation.
He stated that if GST compensation is discontinued after June, 2022, the resource gap in the State would increase and cause large fiscal shocks. It would also lead to reduction in the Capital expenditure and cause contraction of the State economy.
He, accordingly, requested the GST Council to extend the compensation window by another five years in the interest of revenue resources of the State.