Andhra Pradesh

State expects decision on GST dues at May 28 council meeting

The State government is pinning all hopes on the May 28 GST Council meeting, which is being conducted after a gap of almost six months, as it expects the Centre to release the accumulating compensation dues.

The Central government has so far paid ₹5,750.16 crore as compensation to the State government. It has provided another ₹2,311.08 crore as a loan, which it will repay on behalf of the State.

“The Centre government owes an amount of ₹1,806.78 crore up to January 2021. The GST compensation for the months of February and March 2021 are yet to be ascertained. The total compensation is likely to be much higher if the dues for these months are included,” says an official on condition of anonymity.

As per the GST law, the Centre compensates the States to ensure that their revenue is protected (Protected Revenue in GST parlance) at the level of 14% of the tax collection in 2015-16, which is the base year.

If the revenue is less than 14% of the base-year collection, the States are entitled to receive GST compensation.

The officials have estimated that the protected revenue for the current fiscal, 2021-22, will be ₹30,672 crore (it will be ₹2,556 crore per month). If the revenue collection is below this, the Central government has to pay compensation.

According to the Commercial Tax officials, Andhra Pradesh may have to seek GST compensation if the second wave of COVID-19 impacts its revenues.

To avoid seeking compensation, the GST collection this year should be 37.78% more than the collection in 2020-21.

The GST collection in the last fiscal stood at ₹22,259.88 crore. “The State, therefore, has to improve the GST collection by ₹8,412 crore this year,” say officials.

Andhra Pradesh had received a compensation of ₹280 crore during the first year of the launch of GST. The State’s monthly average income was fixed at ₹1,120.80 crore in 2015-16.


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Printable version | Jun 15, 2021 8:40:22 PM | https://www.thehindu.com/news/national/andhra-pradesh/state-expects-decision-on-gst-dues-at-may-28-council-meeting/article34590631.ece

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