GST compensations will be paid to states today, 16,982 crores to be paid as arrears

NEW DELHI: Union Finance Minister Nirmala Sitharaman announced that the GST compensation arrears of 16,982 crores will be handed over to the states today. The Union Minister told the media after the GST Council meeting that since this amount is not available in the compensation fund, the government is allocating the amount from its own hands. The minister informed that this amount will be recovered from the compensation cess in the future.

It was agreed that the central government should compensate the states for their loss of tax revenue for a period of five years after the implementation of GST. The Center did not accept the request of the states to extend the period of this compensation. GST exemption for some products has also been announced today. GST waived for tracking devices. Earlier it was 18 percent. GST on pencil sharpeners has been reduced from 18 percent to 12 percent. GST on jaggery syrup has been reduced from 18 percent to 5 percent.