Explain the rationale behind the Goods and Services Tax (Compensation to States) Act of 2017. How has COVID-19 impacted the GST compensation fund and created new federal tensions?
Question source: pwonlyias.com
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- 101st Amendment
Compensation to States for five years was promised under the 101st Amendment and enacted through this Act.
- One year of two-slab GST: Finance Minister cites a wider base and higher collections
The 2025 decision to hold tobacco at old rates pending compensation cess obligations links to the compensation story, but the question is about COVID-era tensions.