GST is the new unified tax regime in India. (photo by Arun Sharma/Hindustan Times via Getty Images)The government on Monday (27 July) released the last tranche of GST compensation amount of Rs 13,000 crore to the States and Union Territories (UTs) for the bygone fiscal year of 2019-20, reports Hindu Businessline.
With this, the total sum of GST compensation extended to the States and UTs for 2019-20 stands at Rs 1.65 lakh crore, which is as much as 73 per cent higher than the cess collected during the same period.
The rest of the sum was collated by using the balance cess collections from 2017-18, and also 2018-19. Also, the government transferred to the Compensation Fund account a total of Rs 33,412 crore from the Consolidated Fund of India (CFI) as an adjustment of the balance IGST collected during 2017-18 which had then been transferred to the CFI.
It should be noted that the centre had guaranteed the state governments a revenue growth rate of 14 per cent a year during the first five years under the GST regime, in the failure of which, the centre would ensure that any shortfall in GST collections during this period does not affect the state finances.
For the same, the compensation amount is calculated for each state or UT by taking the revenue collections from 2015-16 as the base.
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