GST Sentimeter: Unacceptable that Centre used GST compensation cess to pad up its finances, says Amit Mitra

India's top auditor has red-flagged violations by the Centre on the GST compensation front. The Comptroller and Auditor General (CAG) has highlighted that in the first two years post the GST regime kicking in, the Centre used GST cess of over Rs 47,000 crore elsewhere instead of crediting it to the GST Compensation Fund. The CAG pointed out that the short-crediting was a violation of the GST Compensation Cess Act of 2017.

The CAG has also red-flagged lapses as far as sharing of Integrated Goods and Services Tax (IGST) is concerned. The report points out that close to Rs 14,000 crore was left unapportioned and retained in the Consolidated Fund of India.

According to the GST laws, IGST has to be shared between the centre and states in the ratio of 50:50. Further, as per recommendations of the 15th Finance Commission, the centre is to give a further 42 percent from its share to the states. Government sources however have denied allegations of "diversion of funds."