States' GST compensation may need to be extended beyond 2022: Report

Serious inconsistencies in data make revenue projection problematic

States will need to be compensated for their revenue shortfall under goods and services tax (GST) even after 2022 — the sunset year for compensation under the law — because of slow revenue growth, a report commissioned by the 15th Finance Commission (FC) has noted.

It shows that states would require compensation of at least Rs 1.67 trillion in 2024-25, because none of them would be able to achieve 14 per cent growth every year.

While Karnataka would need the highest compensation among states, Delhi too would face a revenue shortfall to a great extent in coming years, the report warns.

Compensation cess