No amount pending to any State due to IGST: Union Finance Ministry

The Union Finance Ministry on Friday clarified that the Central government does not retain any GST that is due to any State government. There is no amount pending to be given to any State due to Integrated Goods and Services Tax (IGST), it said in response to The Hindu’s report ‘State (Tamil Nadu) recovers over Rs. 1,500 crore of IGST revenue’ published on June 14.

The Ministry said the Centre had not retained in its kitty Rs. 3,046 crore to be paid to Tamil Nadu on account of IGST. Amount due to States are paid through a monthly IGST Settlement Process for the 50% share of IGST on inter-State supplies to the States. The share is distributed based on actual consumption. This is clearly delineated in the GST Rules, it added.

For instance, buyers claiming Input Tax Credit (ITC) for IGST in their returns identify the beneficiary State. Once the ITC is utilised, the State’s portion is settled. Sometimes, ITC may not be utilised for reasons, such as the supply of exempt or non-GST goods; the blocked ITC as per law; or a lapsed time period. In these scenarios, the beneficiary State cannot be determined, leading to a surplus in the IGST head.

Source : https://www.thehindu.com/news/national/tamil-nadu/no-amount-pending-to-any-state-due-to-igst-union-finance-ministry/article68291009.ece