GST compensation paid to states drops to Rs.11.9 thousand crore


The Goods and Services Tax (GST) compensation paid by the Centre to the state has come down to Rs.11.9 thousand crore during the period between August and September. The states had received Rs.14.93 thousand crore during the June-July period as the bi-monthly GST compensation. During the April-May period, however, the compensation paid was as low as Rs.3.89 thousand crore.

While the compensation provided in June-July was approximately Rs.14.9 thousand crore, the amount dropped to Rs. 11.9 thousand crore in August-September.

The government had collected more than Rs.1 lakh crore as GST in October. The taxes paid in October will be a result of the sales and purchases that were conducted in the month of September. The Centre released Rs.11.9 thousand crore to the states after regular as well as ad-hoc Integrated GST (IGST) settlement.

The government has paid over Rs.15.1 thousand crore to states as regular settlement from IGST. In addition to this payment, the Centre has paid Rs.15 thousand crore to states on provisional basis at the end of the month of October from the remaining IGST that was available with the Centre.

After the regular and provisional settlement in October, the state governments have earned more than Rs.52.9 thousand crore in October. A few states such as Puducherry, Punjab, and Himachal Pradesh witnessed huge revenue shortfalls during the period between April and August.

When the entire fiscal year is taken into consideration, 25 states are experiencing a revenue shortfall and 6 states are enjoying revenue surplus.

Post GST settlements in the April to August period this fiscal, the shortfall recorded by states is 13 per cent as against the 16 per cent shortfall that was faced between July 2017 and March 2018.

In FY2017-18, the Centre had provided the states with over Rs.41.1 thousand crore to states as GST compensation to balance the revenue level at 14 per cent.


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