GST: Opposition-ruled states seek Rs 35,000 crore GST compensation cess

Opposition-ruled states have demanded that the Centre transfer the entire compensation cess collected between April and September to help them meet their expenditure requirements. These states have pegged the amount at ₹35,000 crore.

The Centre released ₹20,000 crore as compensation cess to states on Monday night, the first such disbursal in FY21. “The figures presented up till August were about ₹29,000 crore, which would take the total to at least ₹35,000 crore till September,” Chhattisgarh commercial tax minister TS Singh Deo said, referring to data furnished at the Goods and Services Tax (GST) Council meeting on Monday.

‘Need All Three Instalments’

States are also demanding the immediate release of about ₹ 11,000 crore from integrated goods and service tax (IGST) collections. “This and the additional funds of IGST transferred from the Consolidated Fund of India should be given to states,” Deo said.

Punjab FM Manpreet Badal backed the demand, saying the Centre should not hold on to the cess collections.

Compensation in lieu of GST transition is transferred to states in bimonthly instalments. Three such payments — for April-May, June-July and August-September — are due to the states for the ongoing financial year. “They have to give the full three instalments for our state… this is only part of the first instalment,” said V Narayanasamy, chief minister of Puducherry.

A government official said the compensation is being released as per schedule.