Under the GST law, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the goods and services tax (GST) in July 2017.
Faced with a sharp decline in GST collections due lockdown and disruptions in economic activities across the country, the government is looking at paying GST compensation to states using a portion of its borrowings and repaying it by collecting cess in the sixth or further subsequent years.
Under the GST law, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the goods and services tax (GST) in July 2017.