Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 11-3-2017 Last Replied Date:- 30-12-1899 – GST Council has approved a Bill for compensation to States for revenue loss arising out of introduction of GST in the country. A Bill called Goods and Services Tax (Compensation to the States for Loss of Revenue) Bill, 20… shall provide for compensation to the States for loss of revenue arising on account of implementation of the goods and Service Tax for a period of five years as per section 18 of the Constitution (101st Amendment) Act, 2016. This will extend to whole of India and shall come into force from a date to be notified. Highlights of Compensation Bill are as follows : Provides for revenue loss compensation to States for five years Nominal growth rate projected revenue has been decided @ 14% Base year to be financial year 2015-16 Revenue will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre net
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te or Centre, net of refunds, with respect to the following taxes imposed by the respective State or Centre, which are subsumed into goods and services tax: Value Added Tax (VAT), sales tax, purchase tax, tax collected on works contract, or any other tax levied by the concerned State under the erstwhile Entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016.; Central Sales Tax (CST) levied by the Central Sales Tax Act, 1956; Entry tax, octroi, local body tax or any other tax levied by the concerned State under the erstwhile Entry 52 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016; Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling or any other tax levied by the concerned State under the erstwhile Entry 62 of List-II (State L
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not be included in the calculation of the base year revenue for that State: Any taxes levied under any Act made under the erstwhile Entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to bringing into effect the provisions of the Constitution (101st Amendment) Act, 2016, on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any taxes levied under the Central Sales Tax Act, 1956 on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; Any cess imposed by the State Government on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; and Entertainment tax levied by the State but colle
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inancial year during the transition period, as per the CAG audited figures of revenue collected, the excess amount so released shall be adjusted against the GST compensation amount payable to the State in the subsequent financial year. The total GST compensation payable for any financial year during the transition period to any State shall be calculated as follows: The projected revenue for any financial year during the transition period, that could have accrued to a State in the absence of GST, shall be calculated as per section 6. The actual revenue collected by a State in any financial year during the transition period would be the actual revenue from State Goods and Services Tax collected by the State, net of refunds given by the State under Chapter XI of the SGST Act, and the Integrated Goods and Services Tax apportioned to that State, as certified by the Comptroller and Auditor General of India. Total GST compensation payable in any financial year shall be the difference between
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ught into force. However, no such cess shall be leviable under this section on supplies made by a taxable person permitted to opt for composition levy under section 8 of the GST Law. Salient Features of Compensation Bill The nominal growth rate of revenue subsumed for a State during the transition period is projected at 14% per annum. FY 2016-17 is considered as the base year for calculating the compensation amount payable in any FY during the transition period. The base year revenue for a State will be the sum of revenue collected by the State and local bodies during the base year, taxes levied by the States or Centre, net of refunds, with taxes namely, VAT, CST, Entry tax, Octroi, local body tax, Luxury tax, Advertisement tax, Excise duty on medicinal and toilet preparation and any cess or surcharge levied by State Govt. The Acts of Central and State Govt. under which specific taxes will be subsumed into GST shall be notified. The revenue collected during the base year in a State, ne
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