Reflecting a major shortfall in tax collection,Gujaratstill awaitsGST compensationof Rs 10,186 crore from the Centre for the period from April 2020 to May 2021.
The data issued by the Union finance ministry suggests that in 2020-21, GSTcompensationto the tune of Rs 6,583 crore remains pending for clearance from the Centre. Moreover, Rs 3,603 crore is due for clearance for the April-May 2021 period.
A constitutional amendment made states clocking less than 14% year-on-year Growth in their GST collection eligible for compensation for the loss of revenue, over a five-year period from 2017-2022. This was done because several state levies were subsumed under the common national tax.
Higher the compensation amount due, deeper is the tax collection shortfall. Gujarat clocked a total GST collection of Rs 34,561.34 crore in 2020-21, down by 3.75% against the 2019-20 collection of Rs 35,908.64 crore. The tax collection went down due to the pandemic-induced lockdown and a slow recovery in demand.
Gujarat has the fourth highest amount of compensation pending from the Centre after Maharashtra (Rs 23,133 crore); Karnataka (Rs 12,702 crore) and Uttar Pradesh (Rs 11,157 crore). Being a manufacturing-oriented state, Gujarat is at a loss when it comes to GST collection as compared to the circumstances in the previous tax regime.