Centre Unable To Pay GST Dues To States, UTs: Union Finance Secretary

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Centre Unable To Pay GST Dues To States, UTs: Union Finance Secretary

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When questioned about dues, the finance secretary said that the government might look into reworking the formula for paying the share to the states and UTs, if revenue collection sees further drop.

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The Central government has not yet provided the states and Union Territories with their GST compensation share, the Finance Ministry confirmed on Monday.

Finance Secretary Ajay Bhushan Pandey told the Parliamentary Standing Committee on Finance headed by BJP MP Jayant Sinha, that the government is in 'no position to pay the GST share of states at the current revenue sharing formula', The Hindu quoted the sources.

When questioned how the government plans to clear the dues, Pandey said that the government might look into reworking the formula for paying the share to the states and UTs, if revenue collection sees further drop.

The Centre received backlash from opposition members of the parliamentary committee, as instead of topics focusing on the current state of the economy, the topic chosen for discussion was 'Financing The Innovation Ecosystem And India's Growth Companies'.

The committee was meeting for the first time since lockdown.

Opposition party leaders including Ambika Soni, Manish Tiwari demanded the finance secretary to discuss the current situation and clarify the overall revenue shortfall.

It is learnt that the Committee Chairperson Sinha said most of the questions posed by the members were political in nature and did not oblige the Finance Ministry officials to respond, and can be answered only by the department's Minister Nirmala Sitharaman.

To this, the members said that if the Standing Committee on Finance cannot discuss the basic questions on the state of the economy, then the panel should rather be considered 'delusional'.

The Centre has recently released GST compensation of Rs 13,806 crore to states for March'2020. Taking this amount into account, entire compensation up to 2019-20 has been released to states, the Ministry said in a statement.

The total amount of compensation released for 2019-20 is Rs 1,65,302 crore whereas the amount of cess collected during the year was Rs 95,444 crore. To release the compensation for 2019-20, the balance of cess amount collected during 2017-18 and 2018-19 was utilised.

The Centre also said that it had transferred Rs 33,412 crore from Consolidated Fund of India to the Compensation Fund as part of an exercise to apportion balance of Integrated GST (IGST) pertaining to 2017-18, the media reported.

Also Read: Jammu & Kashmir Extends Ban On High-Speed Internet Until August 19

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