Meghalaya has received a total of Rs 633 crore as GST compensation from the Centre since 2017 till date.
As per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016, Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years.
According to sources, the GST compensation released to Meghalaya for Financial Year 2017-18 was Rs 140 crore. For 2018-19, the GST compensation released to the State was Rs 66 crore.
The GST compensation released to the State for 2019-20 was Rs 157 crore while The GST compensation received for 2020-21 was Rs 270 crore. The Centre has not yet released GST compensation to Meghalaya for 2021-22 and 2022-23.
The issue of compensation to states and union territories and augmenting resources under GST were discussed in detail in the 45th GST Council meeting held in Lucknow. Following the decision of the Council, two Group of Ministers (GoMs), namely GoM on GST System Reforms and GoM on Rate Rationalisation have been constituted.
The GoM on Rate Rationalisation has submitted its interim report, recommending certain inverted duty corrections and pruning of exemptions, which was discussed and considered in the last GST Council meeting held at Chandigarh.
As a result, the continued reforms in GST undertaken by Centre and states, on the recommendations of the GST Council, buoyancy in GST revenue have been achieved in the recent months.
The average monthly gross GST collection for the first quarter of the FY 2022-23 has been Rs 1.51 lakh crore against the average monthly collection of Rs 1.10 lakh crore in the first quarter of the last financial year showing an increase of 37 per cent.
A few states have requested for extension of payment of GST compensation beyond the transition period of five years.
As per Section 7 of the GST (Compensation to States) Act, 2017, the states are required to be compensated for loss of revenue due to implementation of GST with effect from July 1, 2017 for five years’ period.
During the transition period, the states’ revenues are protected at 14 per cent growth rate per annum over the base year revenue (2015-16). Accordingly, the states are being compensated for any shortfall against their protected revenue.
