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PAC’s 19th Report: GST Flaws and the Case for GST 2.0

29 March 20251 min read
ECONOMYPAC’s 19th Report:GST Flaws and theCase for GST 2.029 March 2025safalsetu.com

Why in the news

The Public Accounts Committee’s 19th report criticised GST implementation.

Key findings

  • The States’ Compensation Fund stayed unaudited and unfinalised for over six years, and was not given to the CAG.
  • GST reduced fiscal autonomy of manufacturing-heavy States.
  • The Finance Ministry’s audit approach was called lackadaisical.

Compensation

  • The GST (Compensation to States) Act, 2017 promised 14% annual growth for five years, on an FY16 base.
  • Many States saw delayed or missing payments.

Recommendations

  • A formal CAG mechanism for timely audits, plus better transparency.

Exam angle

  • Committee: PAC, 19th report.

Test yourself

1. The GST (Compensation to States) Act, 2017 promised States how much annual revenue growth?

It promised 14% annual growth for five years, 2017-22.

2. How much inconsistency did the PAC report find in a sample of 10,667 GST cases?

Inconsistencies of ₹32,577.73 crore were found.

3. What do States demand as their share of GST revenue, against the current 50%?

States seek a 70%-80% share.

This topic is part of Daily Current Affairs 29 March 2025 (16 topics).

All topics of the dayDay quizMarch 2025

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