Everything about Centre released Rs. 36,400 cr GST Compensation to states and Union Territories

Hello Everyone and welcome to all of you on your website I am going to tell you about Centre released Rs. 36400 Cr GST Compensation to states and Union Territories till February. If all of you want to know, then all of you must read this article carefully, and If you still do not understand anything at all then all of you can tell me in the comment section below, I will help you.

What is GST Compensation?

GST stands for Goods and Service Tax, it is a value added tax which levied on most goods and services sold for domestic consumption. The GST is paid by the consumers, but it is send back to the government by the businesses selling the goods and services. In effect, GST provides revenue for the government.

Centre released Rs. 36,400-cr-GST-Compensation-to-states

Now we talk about GST Compensation, Compensation is the remuneration (money paid for work or service) awarded to an individual in exchange for their services or individual contributions to your business. The contributions can be their time, Knowledge, skills, abilities and commitment to your company or a project.

The GST (Compensation to States) Act,2017 has provision to compensate states for loss of revenue, if any on the items subsumed under the Act assuming a secular 14% growth rate for such items over the FY16 revenue for 5 years after its introduction.

 Centre released Rs. 36,400 cr GST Compensation to states and Union Territories till February

The Centre has released Rs 36,400 crore as  GST compensation to the states and union territories for 3 moonths till February 2020.

For the month of April-November 2019, the centre had already released the package of Rs 1,15,096 crore to compensate states and Union Territories on account  of revenue loss due to implementation of the Goods ans Services Tax (GST).

Taking stock of the current situation due to COVID-19 where state governments need to undertake expenditure while their resources are adversely hit, the central government has released the GST compensation of Rs 36,400 crore to the state/UTs with legislature for the period from December 2019 to February 2020.

As the compensation requirement of the states was less than collection in the first two years (2017-18-19) of GST rollout , Rs 47,271 crore GST compensation cess collected had remained unutilized in thecompensation.

However, with Revenue mop up from compensation cess falling inadequate, the Centre held backfund transfer to states for revenue shortage beginning August 2019, following which states raised issue. This is the analysis of Centre released Rs. 36,400 cr GST Compensation to states and Union Territories 

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