GST compensation delayed in some states due to lack of AG certificates, FM says ‘Kerala hasn’t sent since…’

The Union Finance Minister, Nirmala Sitharaman, has attributed the delay in Goods and Services Tax (GST) compensation to certain states to the unavailability of Accountant General (AG)'s authenticated certificates. 

“AG's certification is (mandatory) by law between the Centre, states and the AG (accountant general), and it is an agreed process. So, unless the authentication is given by the AG..” she said.

The finance minister pointed out that in case there is a delay in AG's authentication, it is purely a matter between the AG and the state governments, and they will have to figure it out themselves. 

“If between them there is a problem, the authentication certificate gets delayed in reaching the central government,” she said.

She further underlined that to get GST compensation, state governments have to do a lot more. “The state governments have to, pardon me using the word, be efficient to sort it out things with the AG. But without AG certificate, beyond a certain limits, it is very difficult for me to go,” she said.

The minister also disclosed that the sum of Rs. 86,912 crore had been disbursed as GST compensation to all states up to May 31, 2022, following the decision of the GST Council.

Kerala has not sent the AG certificate even for one year: FM

Sitharaman expressed concern about Kerala's failure to send AG certificates for GST compensation for several financial years. The minister said post GST induction, the southern state has not sent AG certificate for GST compensation for 2017-18, 2018-19, 2019-20, 2020-21.

Despite this, the central government has been accused of not releasing funds on time. She urged an MP from Kerala to sit with the state government and request the submission of the AG certificates in one go. 

“You have not sent (the AG certificate) even for one year and you keep blaming us that we are not giving you money on time. On the contrary, in the matter of tax devolution, as per finance commission report, two instalments instead of one have gone to all states. Kerala was also benefited from that,” she said.

Once the certificates are received, Sitharaman promised that the payments would be cleared within a reasonable time.

The finance minister disclosed that the AG's certificate had been received for 2017-18 for Tamil Nadu, and the amount had been disbursed. 

(With inputs from agencies)