Centre releases Rs8,698 crore as GST compensation to states

Bengaluru: The Union government has released Rs8,698 crore to states to compensate them for revenue loss following the goods and services tax (GST) implementation.

All states barring Rajasthan and Arunachal Pradesh, have been given compensation for the first two months (July-August) after GST rollout. “ ₹ 8,698 crore has been paid to states as compensation for July and August. This is 58 per cent of the total cess revenue of ₹ 15,060 crore in the two months,” Bihar deputy chief minister Sushil Modi said.

Compensation was not paid to Arunachal Pradesh because the state couldn’t file any claim because of some issues.

Under GST law, a cess is levied on top of 28% tax on luxury cars, demerit and sin goods like aerated drink and tobacco to collect revenue to compensate states for any revenue loss on account of GST implementation. GST amalgamates over a dozen taxes, including service tax, excise and VAT.