{"id":829,"date":"2024-10-03T10:56:45","date_gmt":"2024-10-03T05:26:45","guid":{"rendered":"https:\/\/www.caclubindia.com\/guide\/?p=829"},"modified":"2025-07-01T12:43:29","modified_gmt":"2025-07-01T07:13:29","slug":"future-of-gst-compensation-cess","status":"publish","type":"post","link":"https:\/\/www.caclubindia.com\/guide\/future-of-gst-compensation-cess\/","title":{"rendered":"Future of GST Compensation Cess: What to Expect Beyond Mar 26"},"content":{"rendered":"\n

Future of GST compensation cess depends on the GST Council’s decision as the main purpose of the cess is to compensate states for revenue losses during the transition to GST.<\/p>\n\n\n\n

GST Compensation Cess was introduced in 2017 and acts as a mechanism to compensate the States on account of loss of revenue which may arise due to implementation of the Goods and Services Tax for the first five years.<\/p>\n\n\n\n

This cess was introduced to indemnify the revenue losses experienced by manufacturing states such as Gujarat, Karnataka, Haryana, Maharashtra, and Tamil Nadu.<\/p>\n\n\n\n

The Compensation Cess is applicable in addition to regular GST.<\/p>\n\n\n\n

Such amount collected as cess is deposited into a separate compensation fund established specifically for this purpose which is then distributed to the states based on their revenue loss as mentioned in the GST (Compensation to States) Act, 2017.<\/p>\n\n\n\n

The financial year 2015-16 was considered as the base year during the transition period to calculate the compensation amount payable to the States.<\/p>\n\n\n\n

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