GST collections see 8.9 pc YoY growth at Rs 1.87 lakh crore in October
It is the eighth consecutive month when GST collections stayed above the Rs 1.7 lakh crore mark.
The Comptroller and Auditor General (CAG) of India in a report has said that the government has violated the law by retaining Rs 47,272 crore of GST compensation cess in the CFI during 2017-18 and 2018-19, and used the money for other purposes.
This led to an overstatement of revenue receipts and understatement of fiscal deficit for the year.
However, last week, the Finance Minister Nirmala Sitharaman has told the Parliament that there was no provision in the law to compensate states for loss of GST revenue out of the Consolidated Fund of India (CFI).
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“Audit examination of information in Statements 8, 9 and 13 with regard to collection of the cess and its transfer to the GST Compensation Cess Fund, shows that there was short crediting to the Fund of the GST Compensation Cess collections totalling to Rs 47,272 crore during 2017-18 and 2018-19,” the CAG said.
“The short-crediting was a violation of the GST Compensation Cess Act, 2017,” it added.
“The amount by which the cess was short credited was also retained in the CFI and became available for use for purposes other than what was provided in the act,” CAG said.
“Short crediting of cess collected during the year led to an overstatement of revenue receipts and understatement of fiscal deficit for the year,” it added.
According to the GST Compensation Cess Act, the entire cess collected during a year is required to be credited to a non-lapsable fund — GST compensation cess fund.
This fund is a part of the Public Account, and is meant to be used specifically to compensate states for loss of revenue.
“From the Fund it paid out Rs 69,275 crore (inclusive of an opening balance of Rs 15,000 crore in the Fund) as compensation to the States/ UT. This resulted in savings of Rs 35,725 crore on account of short transfer to the Fund and of Rs 20,725 crore on account of payment of compensation to the States/ UTs as against BEs of Rs 90,000 crore each for transfer and payment of compensation,” the CAG said.
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