02.02.2023: Karnataka GST compensation up by around Rs 8,000 crore, on par with 2019-20

Compared to the previous fiscal, Karnataka is expected to receive around Rs 8,000 crore more under the GST devolution this time. This will bring Karnataka on par with the funds devolved in 2019-20, before the 15th Finance Commission recommendations kicked in and the Covid pandemic stretched the Central and state finances, said sources.

Sources in the state Finance Department said allocation under devolution for the 2023-24 fiscal will be around Rs 37,000, which was around 20 per cent higher than the funds received under devolution in 2022-23. Karnataka had estimated that it would receive Rs 29,783 crore in the form of devolution for the 2022-23 fiscal.

In 2022-23, apart from the devolved funds, Karnataka had received GST compensation to the tune of Rs 8,633 crore. Karnataka, along with other states, will not be eligible for GST compensation this fiscal as it was stopped in July this year. “But, there are some (GST compensation) arrears which are being reconciled. We will get that next year or in two years,” ISN Prasad, Additional Chief Secretary, Finance Department.

Karnataka’s share in devolution of GST had recorded a steep decline as its share was reduced by almost a percentage point by the 15th Finance Commission. While the state’s share was 4.71 per cent of the total pool of taxes as per the 14th Finance Commission, it dipped to 3.646 per cent under the 15th Finance Commission.

In 2020-21, while Rs 28,000 crore was the devolution projected in the Union Budget estimate, the state received only around Rs 20,073 crore. For 2021-22, devolution for Karnataka was estimated at around Rs 27,145 crore.

Source: https://indianexpress.com/article/cities/bangalore/karnataka-gst-compensation-up-by-around-rs-8000-crore-on-par-with-2019-20-8418385/

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