Finally, Karnataka gets ₹3,600 crore as GST compensation

Amid complaints from States against the Union government over delays in disbursal of compensation under the Goods and Services Tax (GST) regime, Karnataka has been sanctioned to receive nearly ₹3,600 crore.

The release of compensation comes two days ahead of the GST Council meeting on Wednesday, where many States are expected to raise the issue of delay.

The compensation to be paid to Karnataka for August and September was released on Monday, a senior official with the Finance Department said. “Another tranche of ₹3,600 crore for the months of October and November has to be paid to Karnataka. This, we are expecting to release by the end of December,” the official said.

With this, Karnataka has received around ₹12,000 crore as compensation this financial year. The State expects to receive about ₹11,000 crore for the period between October and March. The delay in payment of compensation for the four months between August and November had sparked a furore, with the Congress accusing the Centre of delaying payment of compensation to the State. Before Monday’s release, the dues towards Karnataka stood at around ₹7,200 crore.

“There are three more releases, including that for October and November. We will get compensation for two this financial year, while the release for February and March will come in the next financial year,” a source said.

No showdown

According to another official working with the Finance Department, the dues to Karnataka were not huge when compared with other States as GST collection has been better here. “There was also no way the State would join the other States that have threatened to take the matter to court as the BJP is ruling in both Karnataka and the Centre. Chief Minister B.S. Yediyurappa, who hold the Finance portfolio, was not inclined towards such a showdown either,” a source said.

Sources also said Karnataka would be represented by Home Minister Basavaraj Bommai, the State’s representative in the GST Council, and Commercial Tax Commissioner M.S. Srikar in the GST Council meeting on December 18. Sources also said the State was yet to form its opinion on the agenda for rationalising GST as it has not received the agenda yet.

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Printable version | Feb 23, 2020 5:21:46 PM | https://www.thehindu.com/news/national/karnataka/finally-karnataka-gets-3600-crore-as-gst-compensation/article30324025.ece

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