Avalara > Blog > Goods and Services Tax > Centre releases Rs 36,400-crore GST compensation to states amidst COVID-19 crisis

Centre releases Rs 36,400-crore GST compensation to states amidst COVID-19 crisis

  • Jun 8, 2020 | Divita S Gupta

Days ahead of the 40th Goods and Services Tax Council Meet on June 12, 2020, the Centre has released compensation to states amounting to ₹36,400 crores. This compensation is from December 2019 to February 2020 and comes in after a GST compensation of ₹1.15 trillion for the period of April-November 2019 was released.

States who are under severe stress because the coronavirus pandemic and consequent lockdown need to undertake several important expenses. The States have been knocking heads with the Centre for accelerating the release of compensation.

As per laws provisioned under the Goods and Services Tax framework, if a states' GST revenue does not grow by at least 14% over the base year of 2014-15, the Centre pays them the difference on a bi-monthly basis for the first five years of GST implementation. The Centre has conveyed its inability to pay the compensation on time due to shortfall in cess. 


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.