Centre releases Rs 17,000 crore as GST compensation to states

Centre has released goods and services tax (GST) compensation of Rs. 17,000 crore to states Wednesday, taking the total for FY 22 to Rs 60,000 crore so far.

As per the decision of GST Council, back to back loan of Rs.1.59 lakh crore has already been released in lieu of shortfall in release of GST compensation during the current financial year, the finance ministry said in a statement.

Last week, Centre had released the balance Rs 44,000 crore to states under the back-to-back loan facility in-lieu of GST compensation, taking the total to Rs 1.59 lakh crore, the full amount that the government had planned to pay to states for FY 22 for compensation shortfall.


The government had released Rs 75,000 crore in July and Rs 40,000 crore earlier this month, as back-to-back loan in-lieu of GST compensation shortfall, amid the Covid 19 pandemic that had severely affected revenue generation and in turn capital expenditure for states.

The back to back loan amount of Rs 1.59 lakh crore would be over and above the compensation in excess of Rs 1 lakh crore (based on cess collection) that is estimated to be released to states during this financial year.

The sum total of Rs 2.59 lakh crore is expected to exceed the amount of GST compensation accruing in FY22, the ministry had said.

The total amount released by the government to states now stands at Rs 2.69 lakh crore for FY21 and FY 22, to meet the resource gap due to the short release of compensation on account of inadequate amount in the compensation fund.