Centre used GST compensation cess elsewhere, broke law, says CAG2Photo© indianexpress.com

Centre used GST compensation cess elsewhere, broke law, says CAG

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The CAG has found that the Union government in the very first two years of the GST implementation wrongly retained Rs 47,272 crore of GST compensation cess that was meant to be used specifically to compensate states for loss of revenue.

In its audit report of government accounts, the Comptroller and Auditor General (CAG) flagged that the amount was to be credited to the non-lapsable GST Compensation Cess collection fund for payment to states for loss of revenue due to implementation of GST since 2017, but the government did not do so, and thus violated the GST law.

"The GST Compensation Cess Act, 2017 provides for levy of cess for the purpose of providing compensation to the states for loss of revenue arising due to implementation of GST for a period specified in the Act," CAG said.