The centre will tonight release Rs 20,000 crore in GST compensation due to state and union territory governments, Finance Ministry Nirmala Sitharaman said during the 42nd GST Council meeting.
A further Rs 24,000 crore of IGST (integrated goods and service tax) will be released to states that received less earlier by the end of next week, Ms Sitharaman further said.
The Finance Minister also said that the GST cess would have to be extended beyond the five year period initially agreed upon between the centre and states.
GST compensation has emerged as a sore point with state and union territory governments this year, particularly with the adverse economic impact of the Covid pandemic and lockdown.
After a meeting of the GST Council earlier this year, state and UT governments were asked to borrow – either the full amount of Rs 2.35 lakh crore (which included Covid relief) or Rs 97,000 crore (which was only GST compensation).