Pending GST Dues: Status and Government Action Plan

The Goods and Services Tax (GST) regime in India has brought significant changes to the tax structure, ensuring a unified market across the country. However, challenges remain, particularly regarding the timely release of GST compensation dues to states. In response to Rajya Sabha Un-Starred Question No. 364 on 6th February 2024, the Ministry of Finance provided an update on the states that have not submitted their Accountant General (AG) certificates/reports and the pending dues as a result. This article delves into the specifics of the response, highlighting the states affected and the government's action plan.

States Pending AG Certificates

The Ministry of Finance has identified several states that have not submitted their AG certificates/reports for the release of final GST compensation dues. The list of these states and the corresponding years for which the certificates are pending is detailed in the annexure provided by the ministry. Here are some of the key states and the pending periods:

Pending GST Compensation Dues

Provisional vs. Final Compensation: According to the Goods and Services Tax (Compensation to States) Act, 2017, compensation to states is provisionally calculated and released every two months. The final compensation is calculated based on audited revenue figures certified by the Comptroller and Auditor General of India (CAG). The Government of India has released all provisionally admissible GST compensation to all states/UTs for the entire compensation period of five years, from 1st July 2017 to 30th June 2022. The final compensation is pending only due to the non-submission of AG certified revenue figures from certain states.

Government's Action Plan

Steps Taken: The Ministry of Finance has emphasized the importance of submitting AG certificates for the timely release of final compensation. The government has been proactive in addressing this issue by:

1. Issuing Regular Reminders: Regular reminders and follow-ups have been sent to the states to expedite the submission of AG certificates.
2. Coordination with CAG: The ministry is coordinating with the Comptroller and Auditor General of India to ensure timely auditing and certification of revenue figures.
3. Provision of Provisional Compensation: All provisionally admissible GST compensation amounts have been released, ensuring that states have received the bulk of their dues without delay.

Conclusion

The delay in the submission of AG certificates by several states has led to the withholding of final GST compensation. The Government of India is actively working to resolve this issue, ensuring that all states receive their due compensation promptly. States are encouraged to expedite the submission of their AG certificates to facilitate the release of pending funds.