Compensation to states under the value added tax regime during 2005-06, the first year of its implementation, stood at Rs 2,471 crore (Rs 24.71 billion) against a revised Budget estimate of Rs 2,500 crore (Rs 25 billion).

However, with claims for March yet to be submitted by several states and outstanding claims of states like Maharashtra [ Images ] for Rs 1,100 crore (Rs 11 billin) for the July-January 2005-06 period, the VAT compensation for the current fiscal is expected to be higher than the Budget estimate of Rs 3,000 crore (Rs 30 billion).

"The compensation during 2006-07 would be higher than Rs 3,000 crore since five states  - Chattisgarh, Jharkhand, Madhya Pradesh [ Images ], Gujarat and Rajasthan [ Images ] - have joined VAT, taking the total number of states to 30.

The total compensation of the 25 states during April-March 2005-06 inclusive of claims pertaining to the period settled in 2006-07 is likely to touch Rs 4,500 crore (Rs 45 billion)," an official said.

Andhra Pradesh has submitted claims up to January while Bihar and Karnataka [ Images ] have submitted claims up to February.

Tripura has filed claims up to October 2005 while West Bengal [ Images ] has filed its compensation claim up to December 2005.

Officials said the finance ministry had three VAT compensation claims outstanding as on March 31, 2006. Of this, Kerala's [ Images ] claim for Rs 51 crore for December 2005 is unlikely to be processed further as the state's VAT collections for January-February had shown a huge increase, an official said.

Similarly, Sikkim's claim of Rs 3 crore (Rs 30 million) for the July-September period has not been processed on account of incomplete information. The finance ministry has sought more information from Maharashtra for its outstanding claim for the July-January 2005-06 period.

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