GST cess falls 42% short in FY20
Compensation for last fiscal paid to States using previous years’ balance of cess
The Centre made up a 42% shortfall in Goods and Services Tax compensation cess collection in 2019-20 by using balance of cess from previous years, plus a transfer from the Consolidated Fund of India. Meanwhile, the GST Council, which was slated to meet this month to discuss the possibility of market borrowing to meet likely future shortfalls, is yet to do so.
The final instalment of GST compensation for the year — 13,806 crore for March — has been released to the States, the Finance Ministry said in a statement on Monday. This completes the delayed compensation payments for the financial year.
During 2019-20, the cess collected was only 95,444 crore, just under 58% of the 1.65 lakh crore that was paid out to States. “To release the compensation for 2019-20, balance of cess amount collected during 2017-18 and 2018-19 was also utilised. In addition, the Centre had transferred 33,412 crore from the Consolidated Fund of India to the Compensation Fund as part of an exercise to apportion balance of IGST pertaining to 2017-18,” the ministry said.
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The Hindu, 27 July, 2020, https://www.thehindu.com/business/gst-cess-falls-42-short-in-fy20/article32206702.ece