11-07-23 Daily-Gujarat-GPSC Current Affairs

In a major advantage, the government ofGujaratreceived pending Goods and Services Tax (GST) compensation cess worth Rs 9,021 crore from the Centre.

The compensation amount remained pending for over a year. According to data tabled in the state assembly, the Centre owed Gujarat a compensation worth Rs 9,136 crore as on March 31, 2023.

The Union Government owed Rs 23,332 crore to the Gujarat government for the period between January 2021 and December 2021. Similarly, the Centre owed Rs 7,068 crore to the for the period between January 2022 and June 2022, according to the response tabled in the state assembly.

Therefore, in the past two years, dues worth Rs 30,400 crore as compensation cess from the centre were yet to be cleared by the Centre. Against these dues, the state received Rs 3,364 crore in May last year and Rs 855 crore in November last year.

The Centre also provided a loan towards compensation worth Rs 17,045 crore to the state government, on condition that the Centre will pay the loan along with the interest from the Cess Fund.

When GST was rolled out, a provision was made in the act to compensate states for shortfall in revenue. According to the provisions under the GST Compensation Cess Act, the protected income of the states was determined for five years from July 1, 2017 to June 30, 2022.

This protected income was computed projecting a 14% Growth in GST collection per annum, considering the fiscal year 2015-16 as the Base Year.
This means, any state reporting a shortfall in tax mop-up would be eligible for compensation from the Centre for the shortfall.