Centre releases Rs 40,000 crore to States/UTs to meet GST compensation shortfall

The centre Thursday released Rs 40,000 crore to the States and UTs with Legislature under the back-to-back loan facility to meet the shortfall in goods and services tax Compensation.

This takes the total amount released to states to Rs 1,15,000 core.

Earlier on 15th July, 2021 an amount of Rs 75,000 crore was released to the States & UTs with legislature. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection, an official statement said.

Subsequent to the 43rd GST Council Meeting held on 28.05.2021, it has been decided by the Central Government that it would borrow Rs 1.59 lakh crore in 2021-22 and release it to States and UTs with Legislature on a back-to-back basis to meet the resource gap due to the short release of Compensation on account of inadequate amount collected in the Compensation Fund, the statement said.

This amount is as per the principles adopted for a similar facility in FY 2020-21, where an amount of Rs 1.10 lakh crore was released to States under a similar arrangement.


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