Govt's Assumption of 14% GST Compensation Raises Doubts

A section has questioned the govt's assumption of a 14% “high” revenue growth rate covered by a compensation mechanism mentioned in the GST Act.
A BJP minister said, “With inflation hovering around 4-5% and India’s growth expected to be 5-6%, it will be difficult for the Union govt to provide compensation to states at 14% annualized rate.”
In the 3 years preceding 2015-16, the growth rate of taxes in the non-special category states was 8.9% which is lower than 14%.

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Let us tell you that the states have already expressed displeasure over delayed payment of GST compensation.
The Centre has estimated Rs 1.09 lakh crore as compensation cess in the Budget for the current financial year.

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