CUET Preparation Today
The main purpose of the Goods and Services Tax (GST) compensation fund is |
To provide funding for infrastructure development. To provide relief to taxpayers who have paid excess tax. To support the development of micro, small and medium enterprises (MSMEs) To compensate states for the loss of revenue due to the implementation of GST. |
To compensate states for the loss of revenue due to the implementation of GST. |
The correct answer is Option (4) → To compensate states for the loss of revenue due to the implementation of GST. After the introduction of GST, many states faced a shortfall in their tax revenues because several indirect taxes were subsumed under a single tax system. To ensure that states do not suffer financially during this transition, the GST compensation fund was created to make good the revenue loss for a specified period. |
