Page 38 - 31DEC2019E-4

States Opposition-ruled states such as Punjab, West Bengal and

get Kerala have since last month upped the ante for the immediate
release of GST Compensation Fund, reports tehelka bureau

35,298 acing heat over delay in payment of GST compensation, the central
government has released 35,298 crore to states to make up for the loss
of revenue due to rollout of the Goods and Services Tax (GST). When
GST was rolled out on July 1, 2017, states were through legislation prom-
crore to F ised to be compensated for the loss of revenue as not just their taxes
such as VAT were being subsumed in the new levy but also their right to levy
taxes was being snatched.
The compensation amount was fixed at 14 per cent on top of revenue in the
make up base year of 2016-17. The corpus for paying compensation was collected by levy-
ing a cess on top of GST rates on tobacco products, cigarettes, aerated water,
automobiles, and coal. This compensation was to be released after every two
months but the same was pending since August, drawing protests from states,
for GST particularly non-BJP ruled ones.
“The central government has released GST compensation of 35,298 crore
to States and Union Territories today,” the Central Board of Indirect Taxes and
Customs (CBIC) said in a Twitter post. This comes just days before the 38th meet-
revenue ing of the GST Council — the highest decision-making body of the new indirect
tax regime — on December 18, where the opposition-ruled states had planned
to again raise the issue of delayed payments.
Opposition-ruled states such as Punjab, West Bengal and Kerala have since
loss last month upped the ante for the immediate release of GST Compensation
Fund. Their finance ministers had also met Union Finance Minister Nirmala
Sitharaman and the issue came up during the just-concluded Winter Session of
Parliament. Sitharaman had in press conferences and industry events acknowl-

38