TNs average GST collection higher than two previous financial years

TN's average GST collection higher than two previous financial years

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Tamil Nadu’s average per month GST revenue collection has shot up in the present financial year, as compared with the two previous financial years.

As per the data on GST collection submitted in Lok Sabha on Monday (November 29), Tamil Nadu has collected a total of ₹36,480 crore till November 23 this year, and the average monthly collection came to ₹4,560 crore, compared to ₹3,818.5 crore in 2020-21 and ₹4,112.58 crore in 2019-20.

Sources in the Finance Department said that the increase in GST collection is largely due to the rapid opening of the economy after the easing of lockdown norms, as the government wanted the business to continue without any disturbances.

Despite the increase in GST collections, the growth in collections is not to the extent of 14 or 15 per cent as compared to the previous year. Due to this, Tamil Nadu and other states are getting compensation as per the GST Act.

“The economic impact of the pandemic has led to higher compensation requirements due to lower GST collection and at the same time lower collection of GST compensation cess. GST compensation of ₹9,845.43 crore has been released to Tamil Nadu to meet the compensation payable for the period April 2020 to March 2021 partly, as the amount in GST Compensation Fund was not adequate to meet the full compensation requirement,” said Union Minister of State Pankaj Chaudhary in reply to a question raised by DMK MPs Thamizhachi Thangapandian and Kathir Anand.

The issue of GST Compensation to states has been deliberated in the 41st and 42nd GST Council meetings. Accordingly, in FY 20-21, Centre had borrowed ₹1.1 lakh crore under a special window and passed on to the states as back-to-back loans, to help the states to meet the resource gap due to short-release of compensation on account of inadequate balance in the Compensation Fund.

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This arrangement has been finalised after detailed deliberations with the states and all states have opted for this arrangement. Subsequent to deliberations in the 43rd GST Council meeting, Centre has borrowed ₹1.59 lakh crore from the market through a special window in the current financial year and passed it to the states as a back-to-back loan as was done last year.

“The quantum of funds released to Tamil Nadu as loan is ₹6,241 crore for 2020-21 and ₹8,095.25 crore for 2021-22. In addition, depending on the amount available in the Compensation Fund, Centre has also been releasing the regular GST compensation to states to make up for the GST revenue shortfall,” said the minister.

“Taking into account, the GST compensation released from Compensation Fund as well as back-to-back loan released in 2020-21 and 2021-22, GST compensation of ₹2,894 crore and ₹2,049 crore is pending to Tamil Nadu for period April 2020 to March 2021 and April-September, 2021 respectively as per provisional figures,” the minister said.

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