Centre owes Rs 9,136 cr to Gujarat govt as GST compensation: Gujarat Finance Minister

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The Central government owes the Gujarat government Rs 9,136 crore as compensation for loss of income in the past two years under the provisions of the Goods & Services Tax Act, Finance Minister Kanu Desai informed the Gujarat Assembly on Monday, in reply to a starred question by senior Congress legislator Arjun Modhwadia.

Modhwadia sought to know how much compensation amount is to be recovered by the Gujarat government from the Central government for the past two years under the GST law for the loss in income.

In reply, Desai informed that the Central government owes Rs 23,332 crore to the Gujarat government for the period between January 2021 and December 2021. Similarly, the Centre owes Rs 7,068 crore to the state government for the period between January 2022 and June 2022. So, in the past two years, Gujarat has to recover Rs 30,400 crore as compensation from the Centre under the provisions of GST law.

Against that, Gujarat has received Rs 3,364 crore on May 31, 2022 and Rs 855 crore on November 24, 2022. At the same time, owing to the drop in incomes during the Covid-19 pandemic, the Central government also provided Rs 17,045 crore to the Gujarat government as loan towards compensation with a condition that the former will pay the loan along with the interest rate from the Cess Fund.

After this, Desai added, the state government has to recover Rs 9,136 crore from the Central government. He also added that the Central government is likely to pay Rs 3,377 crore towards compensation soon.

During the discussion, Modhwadia said the provision of compensation towards loss in income due to GST is for five years. He sought to know from the finance minister the steps taken by the state government with regard to loss of income owing to the GST law after those five years.

Modhwadia also said that it was because of this reason that initially, then Chief Minister of Gujarat Narendra Modi had opposed the GST law. But now, Modhwadia indicated, under the “double engine government” of the BJP, the loss to Gujarat was more than double under GST law.

In reply, Desai said, “We have been talking about Ek Bharat, Shrehtha Bharat. If India is to develop thoroughly, then the income resources have to be equally distributed. We have taken many steps like checking duplicate registrations with which we can make our state self-reliant.”

Source from: https://indianexpress.com/article/cities/gandhinagar/centre-owes-rs-9136-cr-to-gujarat-govt-as-gst-compensation-desai-8469916/