GST relief: Centre released Rs 1,911 cr during July-Oct ’17

The state has got Rs 1911 crores as GST compensation between July 2017 to October 2017 from the union government. The state needs Rs 2776.31 crores actually for the compensation for the duration between July and December 2017.

The compensation is calculated on the basis of the revenue generated to the state from VAT, CST, entry tax, entertainment and luxury tax, excise duty on medicinal and toilet preparations. These taxes were subsumed after the implementation of GST.

For this, the basis is taken as revenue earned in 2015-16. This revenue is increased annually 14 % to arrive at the figure of compensation which is given to the states . The state informed that revenue collected in December 2017 was Rs 1129.35 crores while in November it was 1207.22 crores.

Notably, GST rules also speak about the compensation to the state for the loss of revenue arising out on account of implementation of GST in pursuance of the provisions of the constitution (one hundred and first amendment) act 2016.

The law states that on the recommendation of GST council, parliament shall provide for the compensation to the states for loss of revenue arising on the account of implementation of GST. This will be given for 5 years.