SYLLABUS SECTION: GS III (ECONOMY)
WHY IN THE NEWS?
Recently, the government has extended the time for levy of GST compensation cess by nearly 4 years till March 31, 2026.
- As per the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, notified by the Finance Ministry, the compensation cess will continue to be levied from July 1, 2022 to March 31, 2026.
- However, whether States would be compensate till that period is not decide yet.
- It was paid bi-monthly and a GST Compensation Cess is collects on supply of select goods or services or both.
- Centre has release entire amount of GST compensation payable to States up to May 31, 2022. However, several states have been demanding to be compensate beyond 5 years.
- As per Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, compensation cess will continue to be levies from July 1, 2022 to March 31, 2026.
- GST (introduced in 2017) is a destination-base tax on consumption of goods and services.
- States were assure compensation for loss of any revenue arising on account of implementation of GST as per provisions of Goods & Service Tax (Compensation to States) Act, 2017 for a period of five years.
Read more: UPSC CURRENT AFFAIRS
SOURCE: THE HINDU