Centre releases Rs 35,298 crore GST compensation

Centre
releases Rs 35,298 crore as GST compensation to states. The move came two days
ahead of the GST Council meeting scheduled for Wednesday.

The central
government on Monday released Rs 35,298 crore to states to make up for the loss
of revenue due to rollout of the Goods and Services Tax (GST).

When GST was
rolled out on July 1, 2017, states were through legislation promised to be
compensated for the loss of revenue as not just their taxes such as VAT were
being subsumed in the new levy but also their right to levy taxes was being
snatched.

The compensation
amount was fixed at 14% on top of revenue in the base year of 2016-17. The collection
 for paying compensation was collected by
charging a cess on top of GST rates on tobacco products, cigarettes, automobiles,
and coal.

This
compensation was to be released after every two months but the same was pending
since August, drawing protests from states.