The center will release 35,000 crore rupees as compensation for the revenue loss from GST to the states soon. GST compensation payment for nine states, including Gujarat, Maharashtra, and Kerala, is expected to double to Rs 60,000-70,000 crore in 2019-20, according to reports.
The states are guaranteed by the Central government, compensation for the revenue loss if their revenue does not increase 14 percent with reference to the base year 2015-16. However, due to the revenue shortage, the center withheld the compensation for the states during 2017-18 and 2018-19.
Finance Minister Nirmala Sitharaman in her Budget speech said it is 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. Highest taxes are levied on Luxury, sin and demerit good and the proceeds are diverted as compensation for the states on account of GST revenue loss.
Post Your Comments