The GST Compensation Story
Mad About Money|September 2018

GST Council had approved a bill for State compensation for revenue loss arising out of GST in the country.

The GST Compensation Story

The Inception

GST Council had approved a bill for State compensation for revenue loss arising out of GST in the country. A bill called Goods and Services (State compensation for loss of revenue) bill shall provide for compensation to the states for loss of revenue arising on the account of implementation of the Goods and Services Tax for a period of 5 Year as per section 18 of the Constitution Act.

Key Points of Compensation Bill

- Provides for revenue loss compensation to the state for 5 years.

- Nominal growth rate projected revenue has been decided @ 14%

- Base year to be financial year.

- Taxes are subsumed to be considered.

- Local Bodies taxes (other than state taxes) excluded.

- Cess for 5 years GST compensation Cess to be levied.

- Input tax credit of cess will be allowed

Procedure of State Compensation for Revenue Loss under GST

Parliament may, by law, provide for state compensation for revenue loss arising out of the implementation of the GST, based on the recommendations of the GST Council. Such compensation could be for a maximum period of 5 Years. States shall receive provisional compensation from Centre for loss of revenue from implementation of GST in each quarter but the final annual number would be decided only after an audit carried out by CAG. The compensation would be met through the levy of a cess called ‘GST Compensation Cess’ on luxury items and sin goods like tobacco, for the first 5 years. Any excess amount after the end of 5-year tenure in the ‘GST Compensation Fund’ so created would be divided between Centre and states.

This story is from the September 2018 edition of Mad About Money.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the September 2018 edition of Mad About Money.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM MAD ABOUT MONEYView All
Pharma In Focus
Mad About Money

Pharma In Focus

The pharmaceutical industry is one of the biggest paperintensive industries in the world and of course, is responsible for the health and general well-being of the population. 

time-read
2 mins  |
December 2017
Mad About Money

The Adhaar Story

Quite frankly, the Adhaar policy took the country by storm. The 12 digit number has promised to replace every proof of identity for all Indians to make any registration process much easier to navigate.

time-read
2 mins  |
December 2017
Why Millennials Wish They Had Grown Up In Baby Boomers' Times
Mad About Money

Why Millennials Wish They Had Grown Up In Baby Boomers' Times

Growing technology and evolving mindsets have caused disparity and to some extent a wide gap between the two generations. Yes, we are talking about Millennials and Baby Boomers.

time-read
3 mins  |
December 2017
The Public Provident Scheme
Mad About Money

The Public Provident Scheme

The PPF scheme was introduced by the Ministry Of Finance (MOF), govt. Of India in the year 1968 to encourage tax free savings by the people. People could deposit money in ppf accounts and the interest earned on those deposits were tax exempted.

time-read
2 mins  |
February 2018
Starting With A Silver Spoon Is Not Essential To Be Wealthy
Mad About Money

Starting With A Silver Spoon Is Not Essential To Be Wealthy

Yes, probably we all envy the Mittals, the Kapoors, the Mallyas! Not because they are billionaires, but because the coming generation would also inherit the wealth and affluence that has been there since years. Perhaps, the great grandson of Vijay Mallya would be able to spend his entire life slurging and indulging into luxury without even stepping out of his house! Probably Taimur Khan, son of Saif and Kareena, would get casted in some big budgeted flick by some renowned filmmaker, to get launched without even struggling to show his acting skills.

time-read
2 mins  |
February 2018
Mad About Money

The Indian Solar Energy Sector - Will It Make A​​​​​​​ Comeback In 2018?

The Indian Solar Energy Sector - Will It Make A Comeback In 2018?

time-read
2 mins  |
February 2018
Smart Investments In Smart Commercial Real Estate
Mad About Money

Smart Investments In Smart Commercial Real Estate

Investing in Commercial Real Estate is no different from any other investments, specifically the traditional residential real estate investment, in the sense that it requires doing your proper research and homework before getting into it. However, to become a smart investor one needs to understand the subtle differences that commercial real estate investment has over the residential version of it.

time-read
2 mins  |
February 2018
Extravagant Lifestyles Of The Wealthy
Mad About Money

Extravagant Lifestyles Of The Wealthy

If you happen to be an average person who thinks apple phones are all about the makers and impressive specifications you could be mistaken.

time-read
2 mins  |
May 2018
Mad About Money

India Post Payment Bank Rollout Plan

May 2018 is an important month for various reasons, one of them being the India post payment banks PAN-India roll out from may! Refuting all the  speculations of delays, etc.

time-read
2 mins  |
May 2018
Mad About Money

Desi Startups For Microsoft Ventures

India recently has been booming with various startups, catering to the regular needs of people, with sound supply chain and operational planning. Considering the innovative ideas of the startups and their rapidly growing popularity, global tech giant Microsoft is looking at investing in Indian tech startups through its venture funding arm. This news came from a senior official from Microsoft. Definitely this is going to be a revolutionary step in Indian economy.

time-read
2 mins  |
May 2018