Nirmala Sitharaman Says All GST Compensation Dues Will Be Cleared
At a meeting of the body that determines GST rates, Finance Minister Nirmala Sitharaman declared that the government would pay the entire 16,982 crore compensation debt out of its own funds today.”We have announced today that the entire due on the pending balance of the GST compensation will be cleared as of today. In other words, the entire pending balance of the GST compensation – a total of ₹ 16,982 crore – will be cleared,” Ms Sitharaman said.
“Although this amount is not really available in the compensation fund as of today, we have decided to release this amount from our own resources and the same amount will be recouped from the future compensation cess collection,” said the Finance Minister, who on February 1 presented her last major Union Budget before the general election next year.
According to Ms. Sitharaman, this payment will cover all compensation owed for the next five years.
The Goods and Services Tax (Compensation to States) Act 2017 enables the federal government to impose a cess that will be used to reimburse the states for money they have lost since the introduction of the GST on July 1, 2017. Some states had revenue losses as a result of the conversion to the GST, for which they must be made up for over a five-year period beginning in July 2017.
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