The CAG released its report on Wednesday.
In its report on the Union government accounts, presented Wednesday, CAG said the short credit was a violation of the GST Offset Act of 2017.
- News18.com
- Last update: September 25, 2020 9:21 AM IST
- FOLLOW US:
Finance Minister Nirmala Sitharaman, citing the opinion of India’s Attorney General, ruled out funding the GST revenue shortfall from the Consolidated Fund of India (IFC) at Lok Sabha last week. While responding to a debate on supplemental demands for grants, the minister had said that the GST Council would come to a common point on ways to compensate states for lost revenue, but argued that the amount should be paid out of compensation. .
However, the Comptroller and Auditor General (CAG) of India found that the Center violated the law by withholding Rs 47,272 crore of GST compensation in the CFI during 2017-18 and 2018-19 and used the funds for other purposes. The Indian Express reported. In its report on the Union government accounts, presented Wednesday, CAG said the short credit was a violation of the GST Offset Act of 2017.
“The audit examination of the information in statements 8, 9 and 13 regarding the collection of the termination and its transfer to the GST Compensation Fund, shows that there was a short credit to the Fund of the collections of the GST compensation for a total of Rs 47,272 crore during 2017-18 and 2018-19, ”the CAG said in a report.
According to the provisions of the GST Compensation Cessation Act, the full cessation collected during one year must be credited to an unexpired fund (GST Compensation Cessation Fund), which is part of the public account and is intended for be employed to make up for lost income from the states. But instead of transferring the entire amount of the GST payment to the GST compensation fund, the government retained it in the CFI and used it for other purposes, the THAT IS TO SAY reported citing CAG.
The national auditor also said that the amount for which the tax was credited short was also withheld in the CFI and was available for use for purposes other than those provided by law. “The short payment of taxes collected during the year led to an overstatement of revenue income and an underestimation of the fiscal deficit for the year,” he added.
The report said that during 2018-19, there was a budget provision of Rs 90,000 crore for transfer to the Fund and an equal amount was budgeted to deliver to the states as compensation. “However, while Rs 95,081 million was collected during the year as GST compensation payment, the Revenue Department transferred only Rs 54,275 million to the Fund,” he added.
The states are looking at a GST revenue shortfall of Rs 2.35 lakh crore this fiscal. Of this, according to the Center’s calculation, an estimated Rs 97,000 crore is due to the implementation of the GST, while the remaining Rs 1.38 lakh crore is due to the coronavirus pandemic.
Last month, the Center provided two options for states to borrow Rs 97,000 crore from a special window facilitated by the RBI, or Rs 2.35 lakh crore from the market and also proposed to extend the offsetting tax applied to luxury, demerit and sin beyond 2022 to repay the loan.
.
