The central government has told a parliamentary panel that it might not be able to pay goods and services tax (GST) compensation due to states in the near future.
Opposition members of the standing committee on finance raised the issue of GST compensation to states at a meeting on July 28, according to a report by The Economic Times.
Finance secretary Ajay Bhushan Pandey, Department for Promotion of Industry and Internal Trade (DPIIT) secretary Guruprasad Mohapatra and other officials were present at the meeting, the report said.
Moneycontrol could not independently verify the story.
The committee's meeting was held to talk about "Financing the innovation ecosystem and India’s growth companies", as per the report.
Also read: States get full GST compensation for 2019-20; but next year's payment remains a question mark
The Centre said it might not be able to clear all GST compensation dues in the near future, since the COVID-19 outbreak has caused a slump in economic activity, the report said.
GST collections might also see a decline due to the economic impact, the report said citing officials.
The Centre released over Rs 1.65 lakh crore as GST compensation to states for 2019-20, the Ministry of Finance said on July 27. The total cess collection in FY20 was Rs 95,444 crore.
The government collected Rs 1.85 lakh crore as GST from April-June 2020, lower than the previous year's collection of Rs 3.14 lakh crore during the same period.