The Central Government has released Rs 19,950 crore as GST compensation to states, taking the total amount released to them to over Rs 1.2 lakh crore.
In a statement, the finance ministry said Rs 19,950 crore was released to states and union territories on last Monday.
When the Goods and Services Tax (GST) came into force in July 2017, states, which lost powers to levy taxes such as VAT, were guaranteed to be compensated for any loss of revenue in the first five years of GST implementation. This compensation was to come out of a pool that is to be created by levy of cess on certain sin and luxury goods over and above the GST tax rate. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.