Central Government informed Parliamentary Panel on Finance that it is in no position to clear the Goods and Services Tax dues of states.
According to a report by The Hindu, Finance Secretary Ajay Bhushan Pandey told the Parliamentary Standing Committee on Finance that the government is in no position to pay the GST share of states at the current revenue sharing formula. The Parliamentary Standing Committee on Finance is headed by BJP MP Jayant Sinha.
An unidentified member of the committee told The Hindu that Finance Secretary Ajay Bhushan Pandey pointed out that the GST Act has provisions to rework the formula for paying compensation to the State governments if the revenue collection drops below a certain threshold.
Meanwhile, the Opposition members of the parliamentary committee were outraged, as the committee was meeting for the first time since lockdown instead of topics focusing on the current state of the economy, the topic chosen was “financing the innovation ecosystem and India’s growth companies”. Congress MPs Manish Tewari, Ambika Soni, Gaurav Gogoi and Nationalist Congress Party legislator Praful Patel demanded that the finance secretary should discuss current matters.
The Centre released over Rs 1.65 lakh crore as GST compensation to states for 2019-20 financial year, including Rs 13,806 crore for March on July 27.
“The central government has recently released GST compensation of Rs 13,806 crore to states for March’2020. Taking this amount into account, entire compensation up to 2019-20 has been released to states,” the Ministry said in a statement.
The total amount of compensation released for 2019-20 is Rs 1,65,302 crore whereas the amount of cess collected during the year was Rs 95,444 crore. To release the compensation for 2019-20, the balance of cess amount collected during 2017-18 and 2018-19 was utilised. The Centre also said that it had transferred Rs 33,412 crore from Consolidated Fund of India to the Compensation Fund as part of an exercise to apportion balance of Integrated GST (IGST) pertaining to 2017-18, it said.