GST Compensation: Centre Clears Dues for All States Except Two; New Mechanism Under Review
By Author | July 24, 2025
GST Recent News – 2025
Centre Releases GST Dues for Most States
The Centre has cleared all provisionally admissible GST compensation dues for states and union territories for the transition period from July 1, 2017, to June 30, 2022.
The Finance Ministry confirmed this in a written reply to Parliament on July 22, 2025.
Arunachal Pradesh and Manipur Still Pending
At present, only Arunachal Pradesh and Manipur await final settlement.
According to the ministry, these payments are delayed because Accountant General (AG) certificates from both states are still pending.
The ministry stressed that no other dues remain unpaid.
GoM Formed to Explore New Compensation Model
To handle revenue challenges in the post-compensation era, the GST Council, during its 54th meeting on September 9, 2024, recommended the creation of a Group of Ministers (GoM).
This group, chaired by the Union Minister of State for Finance, will explore alternatives to the abolished compensation cess.
Government Rules Out Immediate GST Relief
In a separate reply on Monday, the Finance Ministry stated that no immediate GST rate cut is planned.
The decision, it said, falls under the jurisdiction of the GST Council and depends on the findings of a pending rate rationalisation report.
GoM Has Yet to Submit Its Report
Responding to an unstarred question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary clarified that GST rates are based on Council recommendations.
He recalled that, during its 45th meeting on September 17, 2021, the Council had formed a GoM to evaluate rate rationalisation.
However, the group has not submitted its report yet.
Until those recommendations are finalized, he added, any discussion on rate cuts remains premature.
