GST Compensation: Centre Settles Dues for All States Except Arunachal & Manipur



Quick Summary
The Finance Ministry has confirmed that all Goods and Services Tax (GST) compensation dues for the five-year transition period have been paid to states and union territories. The only exceptions are Arunachal Pradesh and Manipur, pending final Accountant General certificates. This marks the end of the compensation scheme, with a Group of Ministers now tasked with exploring alternatives and advising on GST rate rationalisation.

The Finance Ministry has confirmed that all provisionally admissible GST compensation dues for the five-year transition period from July 1, 2017, to June 30, 2022, have been fully released to states and union territories. In a written reply to Parliament on July 22, 2025, the Ministry clarified that no dues remain pending except for Arunachal Pradesh and Manipur, where Accountant General (AG) certificates are still awaited for final settlement. The clarification marks the formal closure of th
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FAQ :

Yes, the Finance Ministry has confirmed that all provisionally admissible GST compensation dues for the five-year transition period have been fully released to states and union territories.

Arunachal Pradesh and Manipur are the only states where final settlement of GST compensation dues is pending, as Accountant General certificates are still awaited.

A Group of Ministers (GoM) has been formed to explore viable alternatives to the GST compensation cess, which expired at the end of its mandated term.

No, the Finance Ministry has stated that there are no immediate plans for GST rate cuts. This issue is under consideration by the GST Council, awaiting the final report from the Group of Ministers on rate rationalisation.

GST rates are decided by the GST Council, a constitutional body comprising representatives from the Centre and all States/UTs, based on consensus.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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