sunyrai

The Centre will soon release another Rs 35,000 crore to states to catch up on the revenue loss on account of GST rollout, a politician said.

Under the products and Services Tax (GST) law, states are guaranteed compensation for revenue loss for five years if their revenue doesn't increase 14 percent on the bottom year of 2015-16.

There were no differences between the Centre and states with reference to compensation payment in 2017-18, 2018-19, and within the first four months of the present fiscal. Get GST Registration at low cost through Haxtax.

However, with revenue mop-up from compensation cess falling inadequate, the Centre held back fund transfer to states for revenue shortage beginning August.

Following this, states raised the difficulty with the Centre and in December 2019, Rs 35,298 crore was released as compensation for August-September.

"We will soon transfer another Rs 35,000 crore from the consolidated fund of India (CFI) to compensation cess fund in 2 installments. the primary tranche is going to be compensation for Octob ..

The excess collection from compensation cess in 2017-18 and 2018-19 was deposited within the CFI earlier and this may now be transferred back to the compensation fund, the official added.

Finance Minister Nirmala Sitharaman in her Budget speech said it's decided to transfer to the GST Compensation Fund balances in two installments.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 percent slabs. On top of the very best tax slab, a cess is levied on luxury, sin, and de.