Centre releases Rs 35,000 cr GST compensation to states

Ahead of the crucial GST Council meeting, the Centre on Monday released about Rs 35,000 crore to states and Union Territories as pending compensation.

The GST Council, the highest decision making body of the indirect tax regime, is slated to hold its meeting on December 18.

"The central government has released GST compensation of Rs 35,298 crore to States and Union Territories today," Central Board of Indirect Taxes and Customs (CBIC) said in a tweet.

Earlier this month, finance ministers and representatives of opposition-ruled states met Finance Minister Nirmala Sitharaman and expressed their concern over delay in payment of GST compensation.

Most of the states rued that the delay in payment has put pressure on their finances affecting many development work.

Earlier in the day, Sitharaman assured states that the Centre will not "renege" on the promise of GST compensations.

The delays to pass on the money are due to a slippage in collections and the states have nothing to be embarrassed about, she said.

The remarks come at a time when states like Maharashtra and Kerala have been demanding the compensation sooner.

"It is certainly their right, I am not denying. At the same time, I am also making it clear to say that I am not reneging on that. States will be given. We are certainly not reneging on it.

"I admit that the payments which had to go the compensation head have not been given for two months slot," Sitharaman said.

"I do not want them (states) to feel embarrassed because it's not their fault nor is it personally my fault," she said, admitting that GST collections have been much lower than expectations.

She attributed the dip in collections to a slip in GST filing due to natural calamities and also due to a slowdown in consumption that has a direct impact on the collections.