The central government has paid Rs 19,950 crore to states as compensation for their revenue loss in the goods and services tax (GST), said a government official. The PM Narendra Modi administration has paid over Rs 1.2 trillion towards GST compensation to states and union territories said the official, who spoke on condition of anonymity. The compensation payment made is more than what has been collected so far this year by way of the cess on certain luxury goods and tobacco amounting to Rs 78,874 crore. The Centre has to utilized the surplus cess to collected in the previous year for additional payments.
This forced authorities to take steps to prevent tax evasion and improve compliance. In the current fiscal the central government has target of collecting Rs 1 trillion in GST cess. Anurag Thakur, Finance Minister of State said that the Parliament in the earlier month it was pertinent to mention that GST Council was vested with the authority to increase or decrease the rate of GST compensation cess and to bring in or exempt any goods within the purview of the cess.