The collection of revenue from GST Cess has seen a 42% shortage in the financial year 2019-20. The GST council has decided to organize a meet to discuss the lending from the market as shortfalls are projected to continue. The finance ministry said that the final installment of the GST collection of the year, amounting Rs. 13,806 crore, has been distributed among the states, completing the payment delays.
The cess collection for the year 2019-20 was Rs. 95,444 crores which is 58% of Rs. 1.65 lakh crore, paid to the states. “To release the compensation for 2019-20, balance of cess amount collected during 2017-18 and 2018-19 was also utilised. In addition, the Centre had transferred ₹33,412 crore from the Consolidated Fund of India to the Compensation Fund as part of an exercise to apportion balance of IGST pertaining to 2017-18,” the ministry said.
The states have been opposing the delay in payment even before the outbreak of coronavirus, which resulted in even shortfall in collections and further delay in payments. Some states are even threatening the central government that they will take legal action against the government. The first quarter of financial year 2020-21 has shown a 41% shortfall GST cess collections so it is expected that the payment to the states will delay even further.
After the meeting of GST council 
Get to know about GST (Goods and Services Tax) council 1st to 37th meeting updates and decisions taken by members. We have covered 1st meeting to last meeting decisions on 12th June 2020, the Finance Minister, Mrs. Nirmala Sithraman said that she will be organising a meeting of the state finance ministers in July 2020. She said, “to discuss exclusively one agenda point, and that is compensation cess which has to be given to the States, and if at all it results in some kind of borrowing, how and who is going to pay for it” but the meeting is yet to be scheduled.
Amid the launch of GST Regime in 2017, the centre had promised the states that it will be distributing all the collections from GST for the first five financial years. With the financial year 2015-16 as a base year, the centre projected that there will be a 41% increase in the collections annually but it hasn’t been the case.
