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GST compensation cess extension
June 29 , 2022
932 days
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- The Central government has extended the time to levy GST compensation cess, till March 31, 2026.
- The levy of cess was scheduled to end on June 30, 2022.
- However, the GST Council decided to extend it further.
- GST was rolled out in India, with effect from July 1, 2017.
- States were assured of compensation for loss of any revenue, in the aftermath of implementation of GST for five years.
- Provision of compensation cess was created under the GST (Compensation to States) Act, 2017.
- The act assumed that there will be an increase by 14 percent in the GST revenue of each State, from the amount collected in 2015-16.
- It was specified that, in case state had collected tax less than 14% in any year, they would be compensated for shortfall.
- This amount was decided to be paid every two months, on the basis of provisional accounts.
- The compensation cess fund was created to pay states for any revenue shortfall.
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