NEW DELHI: The Centre has released Rs19,950 crore as GST compensation cess to states and Union Territories (UTs). However, compensation cess collection will fall short of target as the government could collect only Rs78,874 crore so far against a target of Rs1.09 lakh crore for FY2019-20.

“The central government has released Rs19,950 crore as GST compensation cess to states/UTs on last Monday. With this release of GST compensation, the Central government has released a total of Rs1,20,498 crore towards GST compensation to states/UTs during current financial year,” said finance ministry officials. 

However, slow collection of cess remained a matter of concern as finance ministry official said that only Rs78,874 crore have been collected as compensation cess till January 31, 2020.

For FY2019-20, the target was to collect Rs1.09 lakh crore from cess in GST. A total GST compensation cess of Rs 62,611 crore was collected in FY2017-18, of which Rs41,146 crore was released to states and UTs. In 2018-19, Rs95,081 crore was collected as GST compensation cess of which Rs69,275 crore were released to states/UTs. 

Officials claimed that as on March 31, 2019 an amount of Rs47,271 crore compensation cess collected had remained unutilised after the release of GST compensation to states/UTs in FY2017-18 and FY2018-19. 

Meanwhile, West Bengal Chief Minister Mamata Banerjee Thursday wrote to Prime Minister Narendra Modi expressing concern over the “steady reduction of central funds” to the state, including the delay in releasing GST compensation. She claimed that the Centre was “heavily relying” on cesses and surcharges against taxes in the last five years. 

“Since they do not form a part of the kitty of Central taxes, their devolution to states does not happen,” Mamata wrote, alleging that it had become an instrument to reduce the receivables of the state from the Centre.