New Delhi : The GST Council met today under the chairmanship of Finance Minister Nirmala Sitaraman. After the meeting, Sitharaman said that Rs 20,000 crore received from compensation cess will be distributed among the states. They will get this amount tonight. The GST Council has also decided to continue the compensation cess even after June 2022. The GST Council will meet again on October 12 to discuss the issue of compensation to states.
There was no consensus on the issue of compensation to the states in the meeting. Sitharaman said that 21 states chose the options suggested by the Center. But some states chose no alternative. In a way, the issue of GST compensation has not been resolved in the meeting. Therefore it was decided to discuss this issue further. The next council meeting will be held on 12 October.
Finance Minister Nirmala Sitaraman said that 20 states had agreed to the proposal of the Center in the meeting. But some states turned down the proposal. In a way, the issue of GST compensation has not been resolved in the meeting. The Finance Minister said that further issues will be discussed again in the meeting. We are not denying the compensation amount to the states.
She further said that She said that such a situation has arisen due to the Corona crisis. No one had imagined before that such a situation would come. The current situation is not such that the central government is hiding the fund, and is refusing to give. Funds will have to be borrowed. Bihar Finance Minister Sushil Kumar Modi has suggested that everyone should talk together again on the option of borrowing. So we will meet again on October 12 and this problem will be discussed.
At the same time, it has been decided in the meeting that the compensation cess on luxury and many other items will be extended even beyond 2022. That is, on products like cars, cigarettes, the compensation cess will continue, it has been decided to save the states from harm.
According to the rule, this was applicable only five years after the GST came into force. Significantly, the states are demanding from the Central Government to pay the outstanding compensation of about 2.35 lakh crore GST. In return, the Center has given them two options to borrow. But the states are divided about this offer of the Center.
States owe GST compensation of about Rs 2.35 lakh crore, but the math of the central government is that out of this, the loss of about Rs 97,000 crore is due to the implementation of GST, the remaining revenue loss of about 1.38 lakh crores is due to corona epidemic and lockdown.