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Business News/ Economy / Extended GST compensation cess to be used for clearing earlier dues: Govt

Finance Ministry on Monday said the compensation cess collected between FY23-FY26 will be to clear unpaid liability, arrears of states during first 5 years. Further, the cess collections will also be used to clear loan and interest raised to facilitate states compensation.

Finance Minister Nirmala Sitharaman recently said, total utilisation of GST compensation cess from 2017-18 to 2022-23 is at 6.01 lakh crore as against a collection of 5.63 lakh crore

The finance ministry has released 96,576 crore to states and Union Territories (UTs) so far this year to meet the revenue shortfall on account of the implementation of GST.

GST collections have touched an all-time high of 1.42 lakh crore in March as economic recovery maintained its momentum despite the challenging pandemic situation in January 2022.

March is also the third consecutive month in which revenue from the indirect tax has stayed above 1.3 trillion. official data showed.

GST cess collection, which for the first time since the start of the federal indirect tax regime had crossed 10,000 crore in February, 2022, remained buoyant but fell marginally to 9,417 crore in March. This indicates recovery of business activity at faster pace, the ministry said.

GST revenue collections have remained buoyant in recent months largely because of the milder impact of the Omicron wave of coronavirus and strong efforts by tax authorities to enhance compliance. Several tax rule changes, including the gradual phasing-out of tax credits for purchases that have not been reported by sellers, have contributed to the revenue growth.

Central and state officials have also been on drives against entities that deal in fake invoices for manipulating books.

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Updated: 04 Apr 2022, 05:28 PM IST
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