GST compensation

GST compensation

Part of: GS Prelims and GS-II – Federalism

In News

• The Centre released ₹35,298 crore to the States in Goods and Services Tax (GST) compensation, just two days before a crucial meeting of the GST Council.
• Earlier in Nov 2019, the Centre had written to States voicing concern that due to lower GST collections, the compensation cess might not be enough to pay for the losses arising out of the adoption of the tax system.
• While the government had budgeted for ₹6,63,343 crore in GST collections for the current fiscal, 2019-20, it had garnered only about 50% of its budget estimate in the first eight months.

About GST Council

• The GST Council is a constitutional body established under Article 279A of Indian Constitution
• It makes recommendations to the Union and State Government on issues related to Goods and Service Tax (GST).
• The GST Council is chaired by the Union Finance Minister.
• Its other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.