The Odisha government has asked for GST compensation worth Rs 3647 crore from the Centre for the April to July period. The request was made at the 41st meeting of the GST council, which was held digitally this time around.
Chaired by the Union finance minister Nirmala Sitharaman, the meeting was convened to discuss compensating the states for the revenue shortfall. Representing the state, finance minister Niranjan Pujari and senior officials of the finance department joined the discussion.
As per Pujari, the Centre has proposed two options before the states and has given seven days to think over the proposals. The state will be giving their views in writing within seven days after appropriate discussion.
The GST compensation Act-2017 entitles the states and union territories with assemblies to claim compensation if there was a fall in the revenue growth of the states/UTs because of the implementation of the GST law since July 1, 2017. The states are guaranteed compensation for the first five years since the implementation of the act. The compensation is calculated based on a specified formula.
“Since compensation is guaranteed by the GST law, we have said it is the right of the states to claim compensation from the Centre. Apart from the compensation of the four months (April-July), the Centre also owes Odisha GST compensation of Rs 690 crore of last two fiscals”, said a senior finance department official.
Meanwhile, because of the pandemic, Odisha’s revenue has also been severely affected. The state has seen a 23% fall in revenue collection in the first three months of the current fiscal.