Bhubaneswar: The State Government is yet to receive over Rs 2739 crore as part of GST compensation from the Government of India.
According to a statement given by State Finance Minister Niranjan Pujari in the Odisha Legislative Assembly, the Centre is yet to release GST companion of Rs 1167.50 crore due for the financial year 2021-22 and Rs 1571.83 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 per cent over the base year (2015-16), the Centre has to pay the shortfall amount, on a bi-monthly basis for the first five years of implementing the GST Act. The Union Government has implemented the Goods and Services Tax (GST) since July 1, 2017.
The Government of India has released GST compensation of Rs 2348.08 crore in the financial year 2017-18 against the protected revenue of Rs 10,769.79 crore, Mr.Pujari said.
Similarly, he said, Rs 4241.08 crore has been sanctioned to Odisha in 2018-19 against the protected revenue of Rs 16,370.08 crore while Rs 5331.91 crore has been released by the Centre during 2019-20 as GST compensation. The protected revenue was estimated at Rs 18,661.89 crore in the year 2019-20.
Due to Covid-19 pandemic, the Union Government has sanctioned partial compensation of Rs 4243.42 crore against the protected revenue of Rs 21,274.55 crore during the financial year 2020-21. Moreover, the Government of India has also released Rs 3822 crore to Odisha Government as back-to-back loan to meet the GST revenue shortfall. In total, the State has received Rs 8,065.42 crore in the year 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 the Centre to release balance Rs 1167.50 crore dues, said Mr.Pujari in his reply.
For the current financial year, the protected revenue is estimated at Rs 27,648.42 crore, of which Rs 4608.07 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 1571.83 crore, which is due till data, informed the Finance Minister.
As per the GST Act, the compensation should be paid till June end. However, the State Government has been demanding the Centre to extend the compensation period for another five years.
During the 47th meeting of the GST Council held on 28-29 June, 2022 at Chandigarh, Minister Mr.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.
The Minister accordingly requested the GST Council to extend the compensation window by another five years in the interest of revenue resources of the State.