Compensation is for revenue loss faced by States for GST implementation

The Centre has sought Parliament nod to make cash spend of Rs 60,500 crore as compensation to the States for revenue loss on Goods and Services Tax (GST) roll out in the country.

This forms part of the fourth batch of Supplementary Demand for grants for 2017-18 tabled in Parliament today.

It may be recalled that GST -- billed as the biggest ever tax reform undertaken by India -- was rolled out in the country from July 1 last year. States were assured that the Centre would in the initial years compensate them fully for any revenue loss incurred by them for implementation of GST.

The entire GST compensation of Rs 60,500 crore including GST Compensation Cess of Rs 1,500 crore is proposed to be transferred to a GST Compensation Fund.

Additional expenditure

In all, the fourth batch of Supplementary Demand for grants envisages gross additional expenditure of Rs 9.07 lakh crore including net cash outgo of Rs 85,315 crore (mainly GST compensation of Rs 60,500 crore).

This batch of Supplementary Demand for grants included proposals for technical Supplementary Grants of Rs 8.22 lakh crore, which are matched by additional receipts/ recoveries or corresponding savings of the Ministries/departments.

The other main cash spends include defence pension of Rs 9,260 crore; Swatch Bharat Mission (gramin) of Rs 3,000 crore; interest obligations of Rs 5,721.90 crore.

 12 Mar 2018, 04:44 AM