THE GOODS AND SERVICES TAX (COMPENSATION TO STATES)
GST
Dated:- 27-3-2017
THE GOODS AND SERVICES TAX (COMPENSATION TO STATES)
THE GOODS AND SERVICES TAX (COMPENSATION TO STATES) BILL, 2017
A
BILL
to provide for compensation to the States for the loss of revenue arising on account of
implementation of the goods and services tax in pursuance of the provisions of
the Constitution (One Hundred and First Amendment) Act, 2016.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:-
Short title, extent and commencement.
(1) This Act may be called the Goods and Services Tax (Compensation to States) Act, 2017.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
Definitions.
2. (1) In this Act, unless the context otherwise requires,-
(a) “central tax” means the central goods and services tax levied and collected under the Cent
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Tax Act;
(j) “prescribed” means prescribed by rules made, on the recommendations of the Council, under this Act;
(k) “projected growth rate” means the rate of growth projected for the transition period as per section 3;
(l) “Schedule” means the Schedule appended to this Act;
(m) “State” means,
(i) for the purposes of sections 3, 4, 5, 6 and 7 the States as defined under the Central Goods and Services Tax Act; and
(ii) for the purposes of sections 8, 9, 10, 11, 12, 13 and 14 the States as defined under the Central Goods and Services Tax Act and the Union territories as defined under the Union Territories Goods and Services Tax Act;
(n) “State tax” means the State goods and services tax levied and collected under the respective State Goods and Services Tax Act;
(o) “State Goods and Services Tax Act” means the law to be made by the State Legislature for levy and collection of tax by the concerned State on supply of goods or services or both;
(p) “taxable supply'' means a supply o
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shall be taken as the base year.
Base year revenue.
5. (1) Subject to the provision of sub-sections (2), (3), (4), (5) and (6), the base year revenue for a State shall be the sum of the revenue collected by the State and the local bodies during the base year, on account of the taxes levied by the respective State or Union and net of refunds, with respect to the following taxes, imposed by the respective State or Union, which are subsumed into goods and services tax, namely:
(a) the value added tax, 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;
(b) the central sales tax levied under the Central Sales Tax Act, 1956 (74 of 1956.);
(c) the 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;
(d) the taxes
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t of refunds, under the following taxes shall not be included in the calculation of the base year revenue for that State, namely:-
(a) any taxes levied under any Act enacted under the erstwhile entry 54 of List-II (State List) of the Seventh Schedule to the Constitution, prior to the coming into force of the provisions of the Constitution (One Hundred and First 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;
(b) tax levied under the Central Sales Tax Act, 1956, (74 of 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;
(c) 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 turbin
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cts of the Central Government and State Governments under which the specific taxes are being subsumed into the goods and services tax shall be such as may be notified.
(5) The base year revenue shall be calculated as per sub-sections (1), (2), (3) and (4) on the basis of the figures of revenue collected and net of refunds given in that year, as audited by the Comptroller and Auditor-General of India.
(6) In respect of any State, if any part of revenues mentioned in sub-sections (1), (2), (3) and (4) are not credited in the Consolidated Fund of the respective State, the same shall be included in the total base year revenue of the State, subject to such conditions as may be prescribed.
Projected revenue for any year
6. The projected revenue for any year in a State shall be calculated by applying the projected growth rate over the base year revenue of that State.
Illustration-If the base year revenue for 2015-16 for a concerned State, calculated as per section 5 is one hundred rupees
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the following manner, namely:
(a) the projected revenue for any financial year during the transition period, which could have accrued to a State in the absence of the goods and services tax, shall be calculated as per section 6;
(b) the actual revenue collected by a State in any financial year during the transition period shall be-
(i) the actual revenue from State tax collected by the State, net of refunds given by the said State under Chapters XI and XX of the State Goods and Services Tax Act;
(ii) the integrated goods and services tax apportioned to that State; and
(iii) any collection of taxes on account of the taxes levied by the respective State under the Acts specified in sub-section (4) of section 5, net of refunds of such taxes,
as certified by the Comptroller and Auditor-General of India;
(c) the total compensation payable in any financial year shall be the difference between the projected revenue for any financial year and the actual revenue collected by a State r
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transition period shall be-
(i) the actual revenue from State tax collected by the State, net of refunds given by the State under Chapters XI and XX of the State Goods and Services Tax Act;
(ii) the integrated goods and services tax apportioned to that State, as certified by the Principal Chief Controller of Accounts of the Central Board of Excise and Customs; and
(iii) any collection of taxes levied by the said State, under the Acts specified in sub-section (4) of section 5, net of refund of such taxes;
(c) the provisional compensation payable to any State at the end of the relevant two month period in any financial year shall be the difference between the projected revenue till the end of the relevant period in accordance with clause (a) and the actual revenue collected by a State in the said period as referred to in clause (b), reduced by the provisional compensation paid to a State till the end of the previous two months period in the said financial year during the transiti
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nd Services Tax Act, and such inter-State supplies of goods or services or both as provided for in section 5 of the Integrated Goods and Services Tax Act, and collected in such manner as may be prescribed, on the recommendations of the Council, for the purposes of providing compensation to the States for loss of revenue arising on account of implementation of the goods and services tax with effect from the date from which the provisions of the Central Goods and Services Tax Act is brought into force, for a period of five years or for such period as may be prescribed on the recommendations of the Council:
Provided that no such cess shall be leviable on supplies made by a taxable person who has decided to opt for composition levy under section 10 of the Central Goods and Services Tax Act.
(2) The cess shall be levied on such supplies of goods and services as are specified in column (2) of the Schedule, on the basis of value, quantity or on such basis at such rate not exceeding the rate
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of cess as payable under this Act in such manner;
(b) furnish such returns in such forms, along with the returns to be filed under the Central Goods and Services Tax Act; and
(c) apply for refunds of such cess paid in such form, as may be prescribed.
(2) For all purposes of furnishing of returns and claiming refunds, except for the form to be filed, the provisions of the Central Goods and Services Tax Act and the rules made thereunder, shall, as far as may be, apply in relation to the levy and collection of the cess leviable under section 8 on all taxable supplies of goods or services or both, as they apply in relation to the levy and collection of central tax on such supplies under the said Act or the rules made thereunder.
Crediting proceeds of cess to Fund
10. (1) The proceeds of the cess leviable under section 8 and such other amounts as may be recommended by the Council, shall be credited to a non-lapsable Fund known as the Goods and Services Tax Compensation Fund, which shal
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Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be laid before each House of Parliament.
Other provisions relating to cess.
11. (1) The provisions of the Central Goods and Services Tax Act, and the rules made thereunder, including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals, offences and penalties, shall, as far as may be, mutatis mutandis, apply, in relation to the levy and collection of the cess leviable under section 8 on the intra-State supply of goods and services, as they apply in relation to the levy and collection of central tax on such intra-State supplies under the said Act or the rules made thereunder.
(2) The provisions of the Integrated Goods and Services Tax Act, and the rules made thereunder, including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals, offences and penalties, shall, mutatis mutandis, apply in rela
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the Constitution, under sub-section (3) of section 5;
(b) the conditions subject to which any part of revenues not credited in the Consolidated Fund of the respective State shall be included in the total base year revenue of the State, under sub-section (6) of section 5;
(c) the manner of refund of compensation by the States to the Central Government under sub-section (6) of section 7;
(d) the manner of levy and collection of cess and the period of its imposition under sub-section (1) of section 8;
(e) the manner and forms for payment of cess, furnishing of returns and refund of cess under sub-section (1) of section 9; and
(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules.
Laying of rules before Parliament.
13. Every rule made under this Act by the Central Government shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which
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m the commencement of this Act.
(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.
THE SCHEDULE
[See section 8 (2)]
1. In this Schedule, reference to a “tariff item”, “heading”, “sub-heading” and “Chapter”, wherever they occur, shall mean respectively a tariff item, heading, sub-heading and Chapter in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
2. The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), the section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this Schedule.
S.No.
Description of supply of goods or services
Tariff item, heading, sub-heading, Chapter, or supply of goods or services, as the case may be
The maximum rate at which goods and services tax compansation cess may be collected
(1)
(2)
(3)
(4)
1.
Pan Masala.
2106 90 20
One hundred
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Fifteen per cent. ad valorem.
STATEMENT OF OBJECTS AND REASONS
The Goods and Services Tax (Compensation to States) Bill, 2017, provides for payment of compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for a period of five years in accordance with the provisions of section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.
2. The Constitution (One Hundred and First Amendment) Act, 2016, has amended the Constitution to facilitate the introduction of goods and services tax in the Country. The amendments made in the Constitution confer simultaneous powers upon Parliament and the State Legislatures to make laws for levy of goods and services tax on the supplies of goods or services or both. Section 18 of the Constitution (One Hundred and First Amendment) Act, 2016, provides that, “Parliament shall, by law, on the recommendations of the Goods and Services Tax Council, provide for compensation to the States
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Auditor General of India;
(e) to provide that in case of the eleven Special category States referred to in article 279A of the Constitution, the revenue foregone on account of exemption of taxes granted by States shall be counted towards the definition of Revenue for the base year 2015-16;
(f) the revenues of States that were not credited to the Consolidated Fund of the States but were directly devolved to “mandi” or “municipalities” would also be included in the definition of 'revenue subsumed' if these were collected under the authority of entries 52, 54, 55 and 62 of List II of Seventh Schedule of the Constitution and were subsumed in the goods and services tax;
(g) to generate resources to compensate States for five years for any loss of revenue suffered by them on account of implementation of goods and services tax, a cess shall be levied on such goods, as recommended by the Goods and Services Tax Council, over and above the goods and services tax on that item;
(h) the
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he above objectives.
FINANCIAL MEMORANDUM
Clause 10 of the Bill seeks to provide that the proceeds of the goods and services tax compensation cess, as well as such other amounts as may be recommended by the Goods and Services Tax Council, shall be credited to a non-lapsable Fund known as the Goods and Services Tax Compensation Fund, which shall form part of the public account of India and shall be utilised for purposes specified in the clause 8 of the Bill. Sub-clause (3) of clause 10 of the Bill seeks to provide that fifty per cent. of the amount remaining unutilised in the goods and services tax compensation fund at the end of the transition period shall be transferred to the Consolidated Fund of India as the share of Centre, and the balance fifty per cent. shall be distributed amongst the States and the Union territories in the ratio of their total revenues from the State goods and services tax or the Union territory goods and services tax, as the case may be, in the last year of
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or remission given by a State Government to promote industrial investment in the said State would be included in the total base year revenue of the States, in respect of States referred to in sub-clause (g) of clause (4) of article 279A of the Constitution. Sub-clause (6) of the clause 5 empowers the Central Government to prescribe the conditions subject to which, any part of revenues not credited in the Consolidated Fund of a State shall be included in the total base year revenue of the concerned State.
2. Clause 7 of the Bill seeks to provide the detailed procedure for calculating and releasing the goods and services tax compensation amount to a State. Sub-clause (6) of clause 7 empowers the Central Government to prescribe the manner of refund of compensation by a State to the Central Government, in case excess goods and services tax compensation is paid to the said State by the Central Government.
3. Clause 8 of the Bill seeks to levy a goods and services tax compensation cess on
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to the States for the loss of revenue arising on account of
implementation of the goods and services tax in pursuance of the provisions of
the Constitution (One Hundred and First Amendment) Act, 2016.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:–
1. (1) This Act may be called the Goods and Services Tax (Compensation to States)
Act, 2017.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint.
2. (1) In this Act, unless the context otherwise requires,ۥ
(a) “central tax” means the central goods and services tax levied and collected
under the Central Goods and Services Tax Act;
Short title,
extent and
commencement.
Definitions.
2
(b) “Central Goods and Services Tax Act” means the Central Goods and Services
Tax Act, 2017;
(c) “cess” means the goods and services tax compensation cess levied under
sectio
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projected for the transition
period as per section 3;
(1) “Schedule” means the Schedule appended to this Act;
(m) “State” means,€•
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(i) for the purposes of sections 3, 4, 5, 6 and 7 the States as defined under 25
the Central Goods and Services Tax Act; and
(ii) for the purposes of sections 8, 9, 10, 11, 12, 13 and 14 the States as
defined under the Central Goods and Services Tax Act and the Union territories
as defined under the Union Territories Goods and Services Tax Act;
(n) “State tax” means the State goods and services tax levied and collected
under the respective State Goods and Services Tax Act;
(o) “State Goods and Services Tax Act” means the law to be made by the State
Legislature for levy and collection of tax by the concerned State on supply of goods or
services or both;
(p) “taxable supply” means a supply of goods or services or both which is
chargeable to the cess under this Act;
(q) “transition date” shall mean, in respect o
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ase year
revenue for a State shall be the sum of the revenue collected by the State and the local bodies
during the base year, on account of the taxes levied by the respective State or Union and net
of refunds, with respect to the following taxes, imposed by the respective State or Union,
10 which are subsumed into goods and services tax, namely:—
74 of 1956.
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25
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40
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(a) the value added tax, 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;
(b) the central sales tax levied under the Central Sales Tax Act, 1956;
(c) the 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;
(d) the taxes on luxuries, including taxes on entertainments, amusements, betting and
gambling or any o
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of the base year revenue for
that State, namely:-
(a) any taxes levied under any Act enacted under the erstwhile entry 54 of List-II
(State List) of the Seventh Schedule to the Constitution, prior to the coming into force
of the provisions of the Constitution (One Hundred and First 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;
(b) tax 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;
(c) 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
(d) the entertainment tax le
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tate, subject to such conditions as may be prescribed.
(4) The Acts of the Central Government and State Governments under which the
specific taxes are being subsumed into the goods and services tax shall be such as may be
notified.
(5) The base year revenue shall be calculated as per sub-sections (1), (2), (3) and (4)
on the basis of the figures of revenue collected and net of refunds given in that year, as
audited by the Comptroller and Auditor-General of India.
(6) In respect of any State, if any part of revenues mentioned in sub-sections (1), (2),
(3) and (4) are not credited in the Consolidated Fund of the respective State, the same shall
be included in the total base year revenue of the State, subject to such conditions as may be
prescribed.
6. The projected revenue for any year in a State shall be calculated by applying the
projected growth rate over the base year revenue of that State.
Illustration-If the base year revenue for 2015-16 for a concerned State, calculat
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y State shall be calculated in the following manner, namely:—
(a) the projected revenue for any financial year during the transition period,
which could have accrued to a State in the absence of the goods and services
tax, shall be calculated as per section 6;
(b) the actual revenue collected by a State in any financial year during the
transition period shall beۥ
(i) the actual revenue from State tax collected by the State, net of
refunds given by the said State under Chapters XI and XX of the State
Goods and Services Tax Act;
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35
40
(ii) the integrated goods and services tax apportioned to that State;
45
and
(iii) any collection of taxes on account of the taxes levied by the
respective State under the Acts specified in sub-section (4) of section 5,
net of refunds of such taxes,
as certified by the Comptroller and Auditor-General of India;
50
5
(c) the total compensation payable in any financial year shall be the difference
between the projected re
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l revenue collected by a State till the end of relevant two months
period in any financial year during the transition period shall be-
(i) the actual revenue from State tax collected by the State, net of refunds
given by the State under Chapters XI and XX of the State Goods and Services
Tax Act;
(ii) the integrated goods and services tax apportioned to that State, as
certified by the Principal Chief Controller of Accounts of the Central Board of
Excise and Customs; and
(iii) any collection of taxes levied by the said State, under the Acts specified
in sub-section (4) of section 5, net of refund of such taxes;
(c) the provisional compensation payable to any State at the end of the relevant
two month period in any financial year shall be the difference between the projected
revenue till the end of the relevant period in accordance with clause (a) and the actual
revenue collected by a State in the said period as referred to in clause (b), reduced by
the provisional compensat
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supplies of goods or services or
both, as provided for in section 9 of the Central Goods and Services Tax Act, and such inter-
State supplies of goods or services or both as provided for in section 5 of the Integrated
45 Goods and Services Tax Act, and collected in such manner as may be prescribed, on the
recommendations of the Council, for the purposes of providing compensation to the States
for loss of revenue arising on account of implementation of the goods and services tax with
effect from the date from which the provisions of the Central Goods and Services Tax Act is
brought into force, for a period of five years or for such period as may be prescribed on the
50 recommendations of the Council:
Levy
and
collection of
cess.
Returns,
payments and
refunds.
6
Provided that no such cess shall be leviable on supplies made by a taxable person who
has decided to opt for composition levy under section 10 of the Central Goods and Services
Tax Act.
(2) The cess shall be
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ariff Act, 1975.
9. (1) Every taxable person, making a taxable supply of goods or services or both,
shallۥ
(a) pay the amount of cess as payable under this Act in such manner;
5
10
51 of 1975.
15
52 of 1962.
(b) furnish such returns in such forms, along with the returns to be filed under
the Central Goods and Services Tax Act; and
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(c) apply for refunds of such cess paid in such form,
Crediting
proceeds of
cess to Fund.
as may be prescribed.
(2) For all purposes of furnishing of returns and claiming refunds, except for the form
to be filed, the provisions of the Central Goods and Services Tax Act and the rules made 25
thereunder, shall, as far as may be, apply in relation to the levy and collection of the cess
leviable under section 8 on all taxable supplies of goods or services or both, as they apply in
relation to the levy and collection of central tax on such supplies under the said Act or the
rules made thereunder.
10. (1) The proceeds of the cess le
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and any expenditure in connection with such audit shall be payable by the Central Government
to the Comptroller and Auditor-General of India.
(5) The accounts of the Fund, as certified by the Comptroller and Auditor-General of
India or any other person appointed by him in this behalf together with the audit report 45
thereon shall be laid before each House of Parliament.
7
11. (1) The provisions of the Central Goods and Services Tax Act, and the rules made
thereunder, including those relating to assessment, input tax credit, non-levy, short-levy,
interest, appeals, offences and penalties, shall, as far as may be, mutatis mutandis, apply, in
relation to the levy and collection of the cess leviable under section 8 on the intra-State
5 supply of goods and services, as they apply in relation to the levy and collection of central
tax on such intra-State supplies under the said Act or the rules made thereunder.
(2) The provisions of the Integrated Goods and Services Tax Act, an
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all or any of the following matters, namely:—
(a) the conditions which were included in the total base year revenue of the
States, referred to in sub-clause (g) of clause (4) of article 279A of the Constitution,
under sub-section (3) of section 5;
(b) the conditions subject to which any part of revenues not credited in the
Consolidated Fund of the respective State shall be included in the total base year
revenue of the State, under sub-section (6) of section 5;
(c) the manner of refund of compensation by the States to the Central Government
under sub-section (6) of section 7;
(d) the manner of levy and collection of cess and the period of its imposition
under sub-section (1) of section 8;
(e) the manner and forms for payment of cess, furnishing of returns and refund
of cess under sub-section (1) of section 9; and
(f) any other matter which is to be, or may be, prescribed, or in respect of which
provision is to be made, by rules.
13. Every rule made under this Act
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ppear to
it to be necessary or expedient for removing the difficulty:
Provided that no order shall be made under this section after the expiry of three years
from the commencement of this Act.
(2) Every order made under this section shall, as soon as may be after it is made, be laid
50 before each House of Parliament.
Other
provisions
relating to
cess.
Power to
make rules.
Laying of
rules before
Parliament.
Power to
remove
difficulties.
THE SCHEDULE
[See section 8 (2)]
1. In this Schedule, reference to a “tariff item”, “heading”, “sub-heading” and
“Chapter”, wherever they occur, shall mean respectively a tariff item, heading, sub-heading
and Chapter in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
2. The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975
(51 of 1975), the section and Chapter Notes and the General Explanatory Notes of the First
Schedule shall, so far as may be, appl
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lomerated.
Aerated waters.
Motor cars and other motor
vehicles principally designed
for the transport of persons
(other than motor vehicles
for the transport of ten or
more persons, including the
driver), including station
wagons and racing cars.
Any other supplies.
2202 10 10
8703
Fifteen per cent. ad valorem.
Fifteen per cent. ad valorem.
8
Fifteen per cent. ad valorem.
STATEMENT OF OBJECTS AND REASONS
The Goods and Services Tax (Compensation to States) Bill, 2017, provides for payment
of compensation to the States for loss of revenue arising on account of implementation of
the goods and services tax for a period of five years in accordance with the provisions of
section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.
2. The Constitution (One Hundred and First Amendment) Act, 2016, has amended the
Constitution to facilitate the introduction of goods and services tax in the Country. The
amendments made in the Constitution confer simultaneous
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he projected nominal growth rate of revenue subsumed for a State during
the transition period shall be fourteen per cent. per annum;
(d) to provide that the compensation shall be released bi-monthly against the
figures given by the Central accounting authorities provisionally and final adjustment
shall be done after getting audited accounts of the year from the Comptroller and
Auditor General of India;
(e) to provide that in case of the eleven Special category States referred to in
article 279A of the Constitution, the revenue foregone on account of exemption of
taxes granted by States shall be counted towards the definition of Revenue for the
base year 2015-16;
(f) the revenues of States that were not credited to the Consolidated Fund of the
States but were directly devolved to “mandi” or “municipalities” would also be included
in the definition of 'revenue subsumed' if these were collected under the authority of
entries 52, 54, 55 and 62 of List II of Seventh Schedule of
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period shall be transferred to the
Consolidated Fund of India as the share of the Centre, and the balance fifty per cent.
shall be distributed amongst the States and Union territories in the ratio of their total
revenues from the State goods and services tax or the Union territory goods and
services tax, as the case may be, in the last year of the transition period.
4. The Bill seeks to achieve the above objectives.
NEW DELHI;
The 23rd March, 2017.
ARUN JAITLEY.
FINANCIAL MEMORANDUM
Clause 10 of the Bill seeks to provide that the proceeds of the goods and services tax
compensation cess, as well as such other amounts as may be recommended by the Goods
and Services Tax Council, shall be credited to a non-lapsable Fund known as the Goods and
Services Tax Compensation Fund, which shall form part of the public account of India and
shall be utilised for purposes specified in the clause 8 of the Bill. Sub-clause (3) of clause 10
of the Bill seeks to provide that fifty per cent.
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used directly for
the payments of goods and services tax compensation to the States.
11
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 5 of the Bill seeks to provide the detailed procedure for calculating the base
year revenue of a State on the recommendations of the Goods and Services Tax Council.
Sub-clause (3) of the said clause empowers the Central Government to prescribe the conditions
subject to which, the amount of revenue foregone on account of exemptions or remission
given by a State Government to promote industrial investment in the said State would be
included in the total base year revenue of the States, in respect of States referred to in
sub-clause (g) of clause (4) of article 279A of the Constitution. Sub-clause (6) of the
clause 5 empowers the Central Government to prescribe the conditions subject to which, any
part of revenues not credited in the Consolidated Fund of a State shall be included in the
total base year revenue of the concerned State.
2. Cl
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