The state government has so far received Rs 1,020 crore towards compensation for the financial loss incurred by it after the introduction the goods and services tax (GST) in July.
Finance minister Sashi Bhusan Behera on Monday informed the Assembly in reply to a series of questions on the GST that the state government had received Rs 333 crore as compensation for July and August. The Centre has further sanctioned Rs 687 crore for September and October and the money had been released.
“The compensation will be paid every two months and the final computation will be made at the financial year end. If the compensation amount is found to be less than the notional amount, the loss will be made up by giving the differential amount,” said Behera. The year 2015-16 has been taken as the base year for computing the compensation amount to be paid to any state. A 14 per cent growth rate will be added each year while revising the compensation amount payable to a state.
The Centre will pay the compensation for next five years. During the base year of 2015-16, a sum of Rs 11,047 crore tax was collected by the state government.
This year, tax collection has been projected at Rs 14,357.76 crore. Taking this projection in view, the Centre is paying the differential amount every two months.
The state has collected Rs 3,735.14 crore towards GST during the period between July and October.
This was 2.30 per cent higher than Rs 3,651.28 crore collected during the corresponding period last year. Though the Centre is paying the compensation on GST every two months, there have been apprehensions as to whether it would be paid in the coming days.
The state government had demanded Rs 2,765.57 crore to compensate the financial loss due to reduction of central tax during the period between 2013-14 and 2015-16.
“Despite the decision of the central empowered committee of state finance ministers to pay the states compensation on this account, the central government has turned down the demand of the states unilaterally to pay compensation from 2013-14 till the GST came into effect,” said Behera.