GST Cess to be in a Compensation Fund
THE proceeds of the GST Compensation Cess leviable shall be credited to a non-lapsable fund known as the GST Compensation Fund in the Public Account, and shall be utilized for purpose of providing compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for a period of five years, w.e.f. the date from which the CGST Act is brought into force.
All amounts payable to the States shall be paid from the Goods and Tax Compensation Fund.
Fifty percent of the amount remaining unutilized in the GST Compensation Fund at the end of the transition period shall be transferred to the Consolidated Fund of India, and shall be distributed between the Centre and the States and amongst the States as per provisions of clause(2) of article 270 of the Constitution; and the balance fifty percent shall be distributed amongst the States in the ratio of their total revenues from SGST in the last year of the transition period.