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Government Releases Compensation Fund

Published on April 28, 2022
Current Context: The Government of India has released the compensation fund under the GST Compensation Act 2017.
Government Releases Compensation Fund
  • As Goods and Services Tax is a destination-based tax, therefore the original state is bound to suffer at the initial stage. Therefore the central government came up with an Act called GST Compensation Act 2017, the compensation however would remain valid only for 5 years.
  • In order to compensate the states, the central government imposed various cesses on products that are generally sin goods. The Base year for calculation is 2015-16.
  • The Govt. has released 2.78 Lakh crore Rupees for the states. The compensation is paid every 2 months. Meanwhile, the states have also requested the center to increase the tenure of the GST Compensation Act 2017.


Q.1 What is the base year for the calculation of GST Compensation as per the 2017 Act?
a. 2011-12
b. 2014-15
c. 2015-16
d. 2016-17

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