Goods and Services Tax (Compensation to States) Act, 2017 was enacted to levy Compensation cess for providing compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax with effect from the date from which the provisions of the Central Goods and Services Tax Act is brought into force, for a period of five years or for such period as may be prescribed on the recommendations of the GST Council FM Nirmala Sitharaman on 12th Feb 2020 said lower-than-expected realisation of GST cess was delaying compensation to states as she restates that the Centre was committed to making the payments. She also made it clear that the Centre was not discriminating between states as the law entitled them to compensation presuming that their GST collections grew @ 14%. For 2019-20, the amount targeted to be collected from Cess in GST was Rs 1.09 lakh crore. Of this, Rs 70,534 crore has been collected between April-December 2019. The Centre has released Rs 81,043 crore as GST compensation to states for April-September 2019. GST compensation Cess of Rs 7,607 crore was collected in October, Rs 7,727 crore in November, Rs 8,331 crore in December and Rs 8,637 crore in January. The formula for tax devolution is given by the finance commission and the formula for compensation is given by the GST Act which demolishes the factor of partiality to a state. But if the revenue collection itself has gone down, then the portion which goes to states will also be smaller. Pointing to some “green shoots” in the economy, Sitharaman said the Centre and RBI are making constant efforts to boost consumption. On concerns over rising unemployment, she said the government is set to come out with “comprehensive jobs data” that will enable it to pinpoint the areas that need corrective measures.