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The Finance Ministry on Tuesday informed the Rajya Sabha that over ₹53,000 crore of GST compensation is yet to be released to 28 States and 3 Union Territories (with legislature) in the current fiscal. The Ministry also said the number of counterfeit notes detected in all denominations except ₹500 has come down.
GST compensation
In a written reply to a question, Finance Minister Nirmala Sitharaman said GST compensation of over ₹1.59 lakh crore has been paid under ‘back-to-back loan arrangement’ (Centre borrows on behalf of States/UTs from open market and passes it on to the States and UTs. Another ₹96,000 crore has been paid from the fund which gets money from compensation cess.
“The Centre is committed to release full GST compensation to the States/UTs as per GST (Compensation to States) Act, 2017 for the transition period by extending the levy of compensation cess beyond 5 years to meet the GST revenue shortfall as well as servicing the loan borrowed through special window scheme,” the Finance Minister said in her reply. The period of compensation payout to States and UTs is coming to an end in June this year.
For the purpose of payment of compensation to States for any loss of revenue arising on account of implementation of GST for five years, a GST Compensation Cess is levied on select items. This is transferred into a non-lapsable fund known as GST Compensation Fund which forms part of the Public Accounts.
All releases of compensation to States are done only out of Compensation Fund and not from the Consolidated Fund of India. “GST compensation for financial years 2017-18, 2018-19, 2019-20 and 2020-21 has already been paid to the States/UTs. The economic impact of the pandemic has led to higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess,” the FM said.
Income Tax payers
Replying to a question on percentage of tax payers vis-à-vis the population of the country, she said that total number of taxpayers for assessment year(AY) 2020-21 is over 8.22 crore. This includes people who pay income tax and corporate tax and who have either filed a Return of Income for the relevant AY or the ones whose tax has been deducted at source in the relevant FY (2019-20) but the taxpayer has not filed the return.
Counterfeit Notes
In response to another question, Pankaj Chaudhary, Minister of State, Finance, said that the demonetisation of bank notes of ₹500 and ₹1000 denominations has helped curb terrorist funding. “Post demonetisation, the flow of high-quality fake Indian currency notes (FICN) reduced considerably,” he claimed.
He said that the total number of counterfeit notes detected in the banking system has come down from 7.62 lakh in 2016-17 to over 2.08 lakh in 2020-21. However, new notes ₹500 denomination, introduced on November 8, 2016, went up from around 10,000 pieces in 2017-18 to over 39,000 in 2020-21.
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