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Centre to pay Rs 20,000cr pending GST compensation to states: Report

Date: 08-04-2020
Subject: Centre to pay Rs 20,000cr pending GST compensation to states: Report
Amid the coronavirus outbreak, the finance ministry may release pending Rs 20,000 crore goods and services tax (GST) compensation to states, according to a report by the Business Standard.

"The revenue department has been authorised to clear Rs 20,000 crore in GST compensation dues to states," a government official told the publication.

The move comes shortly after the finance ministry released Rs 17,287 crore to states on April 3. The amount was granted as devolution and disaster relief funds.

Moneycontrol could not independently verify the story.

The Rs 20,000 crore will be released from the Consolidated Fund of India (CFI), and not the compensation cess, the publication reported.

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“We can only disburse compensation to states from the compensation cess fund. Since it is not available, approval has been given for releasing it from the Consolidated Fund,” another official told the paper.

The Centre is also working on a second stimulus package to provide relief during the COVID-19 outbreak, the report added.

Several factors need to be taken into account while deciding the stimulus package, such as number of active COVID-19 cases, hotspots, and status of the nationwide lockdown after April 14, officials told the paper.

The Rs 20,000 crore is still lower than what several states have requested, the report said.

Maharashtra and West Bengal requested economic packages of Rs 25,000 crore each, and Tamil Nadu asked for special assistance of Rs 4,000 crore, the report added.

A separate report by the Business Standard said that states were permitted to use 50 percent of their fiscal year's borrowing limit in April alone.

Source:- moneycontrol.com

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