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.