Centre to release compensation of Rs 20,000 crore to states: Nirmala Sitharaman

New Delhi: The 42nd meeting of the GST Council on Monday decided to extend the period of compensation cess beyond the five year transition period slated till June 2022 to meet the revenue gap.

Finance Minister Nirmala Sitharaman said that the Centre will release compensation of Rs 20,000 crore (the amount collected from cess so far this fiscal) to states towards loss of revenue during 2020-21 by Monday night and an amount of about Rs 25,000 crore towards IGST of 2017-18 by next week.

Originally, the cess was to be levied till June 2022 to compensate the states for the revenue gap that emerged from the transition to the Goods and Services Tax (GST) regime in 2017. The extension would mean that cess would be collected for few more years to pay compensation dues of states arising between April 2020 and June 2022.

(With inputs from IANS)