GST Compensation To States

GST Compensation To States

Dated : 20 Aug, 2018

Posted In : GST News


GST Compensation to States


Government has compensated to the States/UTs for the reported revenue deficit on account of implementation of Goods and Services Tax (GST). As per provisions in Section 7 of the GST Compensation Act 2017, loss of revenue to the States on account of implementation of GST shall be payable during transition period and compensation payable to a State shall be provisionally calculated and released at the end of every two months during transition period of 5 years.

As per Section 4 of the said Act, financial year 2015-16 has been taken as the base year for calculating compensation amount payable to States for loss of revenue during transition period. The projected nominal growth rate of revenue subsumed for a state during the transition period shall be 14% per annum.


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