The Goods and Services Tax (Compensation to States) Act, 2017 (Act No. 15 of 2017) provides for compensation to States for loss of revenue arising from the implementation of GST, funded through a compensation cess levied on specified goods (such as tobacco, coal, aerated waters, and motor vehicles).
- Section 1 — Short title, extent and commencement
- Section 2 — Definitions
- Section 3 — Projected growth rate
- Section 4 — Base year
- Section 5 — Base year revenue
- Section 6 — Projected revenue for any year
- Section 7 — Calculation and release of compensation
- Section 8 — Levy and collection of cess
- Section 8A — Power not to recover cess not levied or short levied as a result of general practice
- Section 9 — Returns, payments and refunds
- Section 10 — Crediting proceeds of cess to Fund
- Section 11 — Other provisions relating to cess
- Section 12 — Power to make rules
- Section 13 — Laying of rules before Parliament
- Section 14 — Power to remove difficulties
Note: The Act also contains a Schedule (see section 8(2)) listing the specific goods subject to compensation cess and the maximum rates — including pan masala, tobacco products, coal, aerated waters, and certain motor vehicles — not reproduced here in full given it is a technical tariff-rate table subject to frequent notification changes.
