No clarity on GST compensation to States as Council meet ends

June 30, 2022
Posted by: OptimizeIAS Team
Category: DPN Topics

No clarity on GST compensation to States as Council meet ends

Subject : Economy

Section: Fiscal Policy

Context: GST council meet

Concept:

As per Section 18 of the Constitution (101st) Act, 2016, Parliament shall, by law, on the recommendation of the GST Council, provide for compensation to States for loss of revenue arising on account of implementation of the GST for five years from the date of its implementation. During the transition period, the States’ revenue is protected at 14 per cent per annum over the base year revenue of 2015-16.

Non-BJP ruled states such as Chhattisgarh want the compensation regime to be extended or the share of states in the GST revenues be increased to 70-80 per cent from the current 50 per cent.