Section 7(3) in Goods and Services Tax (Compensation to States) Act, 2017
(3)The total compensation payable for any financial year during the transition period to any State shall be calculated in the following manner, namely : -(a)the projected revenue for any financial year during the transition period, which could have accrued to a State in the absence of the goods and services tax, shall be calculated as per section 6;(b)the actual revenue collected by a State in any financial year during the transition period shall be-(i)the actual revenue from State tax collected by the State, net of refunds given by the said State under Chapters XI and XX of the State Goods and Services Tax Act;(ii)the integrated goods and services tax apportioned to that State; and(iii)any collection of taxes on account of the taxes levied by the respective State under the Acts specified in sub-section (4) of section 5, net of refund of such taxes, as certified by the Comptroller and Auditor-General of India;(c)the total compensation payable in any financial year shall be the difference between the projected revenue for any financial year and the actual revenue collected by a State referred to in clause (b).
