The Bengal government disagrees with Central Government about about GST compensation.

News related to GST Compensation. The AG office closes out the books at the end of the financial year, so at first the pay is based on gross revenue, not net revenue

The state government said it “does not agree” with Union finance minister Nirmala Sitharaman’s Lok Sabha statement about West Bengal and provided the “factual position” in a note

The state government says that the minister said that West Bengal hasn’t sent a GST compensation cess claim with an AG certificate since 2017-18, and that the state owes Rs 1,841 cr to the Centre for deploying the CrPF in the state until 2021-22. The state is also waiting for a reconciliation report about the gramme sadak yojana.

The GST compensation was payable to states for a period of five years, beginning on July 1, 2017 and ending on June 30, 2022. In addition, the compensation amount is based on the actual income deficit above the protected revenue.

Since the AG office closes the books after the fiscal year has ended, the initial remuneration is based on gross rather than net revenue. As soon as the AG ascertains the precise difference between protected revenue and actual revenue, the Centre provides any appropriate compensation on a net basis (if any). The Centre has only provided compensation to the state on a net basis for the last two years—2017–18 and 2018–19. Compensation has been announced based on gross income over the following three years. According to the state administration, Bengal is owed Rs. 2,409.96 crore by the Centre after accounting for net revenue.

The state government stated the Union home ministry deploys central paramilitary personnel for Lok Sabha and state assembly elections. The Election Commission directs the deployment, which doesn’t require state government approval. The Centre should cover deployment costs.

The state claims that CRPF deployment in LWE-affected areas is a national issue, hence the Centre should pay for it.On June 18, 2021, the state government submitted the financial reconciliation of PMGSY-I & II funds to the MoRD in the prescribed format. On September 27, 2022, an updated reconciliation statement was also required. When emailed, the state provided more information.

MoRD has not questioned this report. GST Compensation Cess Claim with AG certificate is an option for contractors/agencies, but none have filed it in MoRD format, so it cannot be sent. The state government says this is not a fund release criterion.

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