Amidst the corona virus epidemic, the Finance Ministry has released 34 thousand crore rupees in two phases towards GST compensation under the GST system to provide relief to the states. This compensation is given to the states to compensate the revenue loss incurred in the GST regime.
Sources said that with the release of Rs 14,103 crore on Tuesday, the Center has paid a total of GST compensation cess of Rs 34,053 crore for October and November. The first installment of Rs 19,950 crore was released on 17 February. According to sources, the finance ministry is also considering paying the pending dues of December and January to the states, which could be paid in several stages soon.
The government has paid Rs 1.35 lakh crore towards GST compensation cess to states and union territories. Under the GST Act, states are to compensate the revenue loss for the first five years in the GST regime. In all, Rs 34,053 crore has been released to the states at such times.
When the states are facing liquidity crisis due to the lockdown enforced across the country to prevent the spread of corona virus. GST collection declined 8.4 percent to Rs 1.06 lakh crore in March from the same month a year ago. The decline in collections was mainly due to decline in revenue from domestic transactions as well as imports.