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 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.

Half of the excess amount would go to the Consolidated Fund of India and would form part of the overall tax treasury, which as per statute, is divided in a fixed proportion between the Centre and states. The remaining 50% would be disbursed among the states in the ratio of their total revenues from SGST in the last year of the transition period.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM MAD ABOUT MONEYView All

The Turkey Story - What Has Gone Wrong For Turkish Finance?

With the fall of Turkish lira, has fueled doubts and fears of financial fallout which could affect the other emerging markets as well as banking systems in Europe.

2 mins read
Mad About Money
September 2018

6 Ways To Grow Up And Get Rich

Loan basics for beginners

4 mins read
Mad About Money
September 2018

Top 5 Most Expensive Perfumes In The World!

Since time immemorial, natural fragrances and perfumes have been crafted for uplifting moods and creating pleasing and evocative fragrances for hair, skin and living spaces. In this world, everybody wants to smell good as well as create a good impression on every one. According to an aromatherapy expert, perfumes and fragrances can excite the olfactory nerve and also few areas of the brain that manages our feelings and memories.

3 mins read
Mad About Money
September 2018

Top 5 Trending SIPs Now

SIP Mutual Funds are funds that adhere to the simple formula of periodic investment to avoid nervous selling during the inevitable ups and downs of the stock market.

5 mins read
Mad About Money
September 2018

The Most Common Millennial Money Myths!

Many a times, millennials get stigmatized as being terrible money managers, whether it‘s indulging in binge shopping instead of enjoying life‘s simple joys, taking on credit like a ruthless tornado engulfing a city or flaunting a sky-dive, while watching their emergency funds vanish into thin air. 

3 mins read
Mad About Money
September 2018

Trending News

The New Atm Skimming Fraud and How to Save  Yourself From It!

3 mins read
Mad About Money
September 2018

The GST Compensation Story

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

5 mins read
Mad About Money
September 2018

Sectoral Snapshot CSR Sector In India

The concept CSR has been in the forefront for many years now.

3 mins read
Mad About Money
September 2018

Intellectual Property Rights As Security For Loans

At Present, a Rule That Has Been Made by the Supreme Court That a Debtor Who Has Defaulted the Loan Cannot Be Allocated a Trademark to the Bank, Whereas in the Matter of Canara Bank Vs Ng Subbaraya Setty Assignment of Trademark Which Was Held by the Supreme Court for Agarbattis, as a Collateral for an Outstanding Loan Is Against the Trademark Act and the Banking Regulation Act. 

2 mins read
Mad About Money
September 2018

Top 10 Most Expensive Resorts In The World!

When it comes to vacations, all you want to do is soak up in the luxuries of your lavish hotel or resort and spend all your time in enjoying these pleasures in life. These luxurious hotels not only offer the best and world-class services but also magnificent ambience which makes the whole experience out of this world. These resorts give you a very peaceful and serene atmosphere amalgamated with a royal luxury which the kings and queens enjoyed in the olden times.

3 mins read
Mad About Money
August 2018
RELATED STORIES

Ryzen 5000 failure rates: We reality‑check the claims

Problems with bad Ryzen chips may be overblown.

4 mins read
PCWorld
April 2021

Microsoft Surface Pro 7+ : A giant leap in graphics performance

It’s the most potent upgrade the Surface Pro line has offered in years.

10+ mins read
PCWorld
April 2021

DIANA DEATH FLICK IS ULTIMATE REVENGE!

Palace terrified Hollywood's royal power couple will bankroll project

2 mins read
National Enquirer
April 19, 2021

How to create strong, secure passwords by learning how to crack them

It gets harder to crack a password if it’s 10 characters or longer—but complexity matters too, of course.

10 mins read
PCWorld
April 2021

TIM OD'S ON GYM!

Stays sober by getting ripped

2 mins read
National Enquirer
April 19, 2021

CorelDraw Graphics Suite 2021 makes life easier for artists working remotely

CorelDraw Graphics Suite 2021 is here with new features for remote work.

2 mins read
PCWorld
April 2021

MORMON CHURCH SUED FOR $100 BILLION CHARITY SCAM!

Outraged member charges donations used to build insurance & property empire

2 mins read
National Enquirer
April 19, 2021

HOW GOOGLE COULD TURN ANDROID INTO JUST ANOTHER SUBSCRIPTION

WITH A SMALL CHANGE TO PHOTOS, GOOGLE COULD BE UPENDING THE WAY WE THINK ABOUT ANDROID UPDATES.

4 mins read
PCWorld
April 2021

DANNY MASTERSON: THEY'RE AFTER ME!

DESPERATE Danny Masterson and his lawyers believe they are victims of anti-Scientology bias and cannot get a fair trial in his Los Angeles rape case, according to sources close to the scandal-scarred actor!

1 min read
National Enquirer
April 19, 2021

HOW FRAME WORK PLANS TO BREAK THE CURSE OF UPGRADEABLE LAPTOPS

THIS SMALL STARTUP THINKS IT CAN PULL OFF SOMETHING NO PC MAKER HAS EVER ACHIEVED.

8 mins read
PCWorld
April 2021