Sitharaman said the entire due wasn’t immediately available in the compensation fund, but the government has decided to release it from its own resources.
“Since there is no amount in the GST compensation Fund, Centre decided to release this amount from its own resources and the same will be recouped from the future compensation cess collection,” said a Finance Ministry statement.
With this release, the Centre would clear the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act 2017.
In addition, the Centre would also clear the admissible final GST compensation to those states who have provided the revenue figures as certified by the Accountant General of the States amounting to Rs 16,524 crore.
The announcement came after the 49th meeting of the GST Council on Saturday, chaired by Union Finance Minister Nirmala Sitharaman.