Punjab fears fall in GST compensation - ECAS Punjab

Punjab fears fall in GST compensation

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Ruchika M Khanna
Tribune News Service
Chandigarh, June 12

Amid growing concern over its fiscal health, the likelihood of a fall in Goods and Services Tax (GST) devolutions to Punjab is becoming a major cause of concern.

The Government of India's GST collections in the first two months of the ongoing fiscal have dropped to about 45 per cent, as claimed by Union Finance Minister Nirmala Sitharaman, after she chaired the 40th meeting of the GST Council in Delhi today. This means that the problem of giving compensation to all states, including Punjab, will only get aggravated in the coming days.

Punjab had estimated that its GST receipts in 2020-21 would touch Rs 15858.68 crore, as against Rs 13443.23 crore in 2019-20. Last week, the Government of India had released a GST compensation of Rs 2,866 crore to Punjab as compensation for the months of December, January and February. With the state's own sources of revenue nearly drying up because of the prolonged lockdown, the GST compensation is a major source of income for the state. With the economic revival still away because of the recession that has set in, the fall in the GST compensation by the Centre (because of a fall in its own collections) will make things difficult for the state.

Notably, the state is facing a shortfall of 30 per cent in its total revenue receipts during this fiscal because of the lockdown. Officials in the Finance Department say the revenue shortfall could be over Rs 21,000 crore against a budget estimate of Rs 7,3975.08 crore as revenue receipts for 2020-21.

Official sources in the government told The Tribune that the state had raised the issue of release of GST compensation for the month of March at the earliest. "The government has a compensation cess of Rs 8,000 crore, from which the compensation for March can be released immediately," said a senior official in the state government, while confirming that the issue had been raised in today's meeting.

from The Tribune https://ift.tt/3dY12HF

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