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Central govt releases Rs 19,950 crore GST compensation to states

Updated : February 21, 2020 06:46 AM IST

After GST came into force in July 2017, states, which lost powers to levy taxes such as VAT, were guaranteed to be compensated for any loss of revenue in the first five years of GST implementation.
This compensation was to come out of a pool that is to be created by levy of cess on certain sin and luxury goods over and above the GST rate.
The shortfall is calculated assuming a 14 percent annual growth in GST collections by states over the base year of 2015-16.

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