NEW DELHI: The Centre has a surplus of Rs 20,000 crore in the GST cess fund as of March 31 which will be used to compensate the states for revenue shortfall suffered due to the roll out of the Goods and Services Tax.
In the last fiscal, the government collected Rs 62,021 crore as cess on sin and luxury goods. This amount will make up for the compensation kitty used to make good for any revenue shortfall faced by states on implementation of GST.
However, the compensation released to the states for July till February was Rs 41,147 crore to ensure that the revenue of the states is protected at the level of 14 per cent over the base year tax collection in 2015-16.
“There is over Rs 20,000 crore surplus in the cess fund. It will be utilised for compensating the states. So far compensation has been released till February. Compensation for March and April will be released in May,” an official said.
Under the GST, states were compensated once in every two months for any revenue loss suffered on account of GST.
The revenue gap of each state is coming down over last eight months. The average revenue gap of all states for last year is around 17 per cent, the finance ministry said in a statement.