Center releases Rs 75,000 crore as GST compensation to states

The government on Thursday said it has released Rs 75,000 crore to states and union territories to compensate for the shortfall in GST revenue. The GST Council, in its meeting on May 28, had decided that the central government would borrow Rs 1.59 lakh crore and release it to states and union territories on a back-to-back basis with the legislature to bridge the resource gap due to low releases. To be. of compensation due to insufficient amount in the Compensation Fund. “The Finance Ministry has today released Rs 75,000 crore to States and Union Territories with Legislature under back-to-back credit facility against GST compensation.

This release is in addition to the normal GST compensation that is released every 2 months from the actual cess collection,” the ministry said in a statement. It further said that all eligible states and union territories (along with the legislature) make arrangements for funding. Regarding reduction of compensation under back-to-back credit facility “For effective response and management of COVID-19 pandemic and a step in capital expenditure, a very important step to be taken to all States and Union Territories”. role to play. To aid the States/UTs in their endeavours, the Finance Ministry has released assistance under back-to-back credit facility during the financial year 2021-22 to the tune of Rs 75,000 crore (about 50 per cent of the total shortfall) . year) has been released today in a single installment.” The balance amount will be released in fixed installments in the second half of 2021-22.

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