Ministry of Finance, on Friday, announced that it had released an amount of Rs 17,000 crore towards GST compensation to States/UTs for the period April to June 2022 on November 24, 2022.
The Central government, in a public statement, said, “The total amount of compensation released to the States/UTs so far, including the aforesaid amount, during the year 2022-23 is Rs 1,15,662 crore.”
"With this release, Centre has released, in advance, the entire amount of Cess estimated to be collected this year till March-end available for payment of compensation to States,” it further added.
Ministry of Finance’s this action comes although the total Cess collection till October 2022, stands at only Rs 72,147 crore and the balance of Rs 43,515 crore is being released by the Centre from its resources.
The Centre, with this release, has released the entire amount of Cess estimated to be collected in 2022 till March-end available for payment of compensation to States in advance.
The government’s this decision was taken to assist the States in managing their resources and ensuring that their programmes especially the expenditure on capital is carried out successfully during the financial year, revealed the Ministry of Finance.
The Centre, in May 2022, had released Rs 86,912 crore as provisional GST compensation to States for the period Feb-May 2022, even though there was only Rs 25,000 crore in the GST Compensation Fund. The government arranged for funds of nearly Rs 62,000 crore from its resources.
At the time of GST implementation, on July 1, 2017, the Central government had agreed to compensate states for five years till June 2022, and protect their revenue at 14 per cent per annum over the base year revenue of 2015-16.
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