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GST Council meeting is going to be discussed regarding the Attorney General’s opinion on compensation

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GST Council meeting is going to be discussed regarding the Attorney General’s opinion on compensation

GST Council meeting

GST Council meeting is going to be discussed regarding the Attorney General’s opinion on compensation

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Minister of finance Nirmala Sitharaman said that it had been only after consultations with the states that the views of the Attorney General (AG) on the products and Services Tax (GST) compensation were sought. He said that this opinion would be discussed within the GST Council meeting. Some states have objected to the Attorney General’s opinion on GST compensation.

When asked about this, Sitharaman said on Saturday that it’ll be discussed within the GST Council meeting. “The issue was discussed within the last meeting of the GST Council,” the minister of finance told reporters here. Members had given their views during this matter. It had been then considered to hunt an opinion from the Attorney General. “In March, the GST Council, headed by the Union minister of finance, decided to hunt the opinion of the Attorney General, the Chief lawman of the govt, on the legality of the Council taking loans from the market. They talk about raising debt from the market to catch up on the shortage of funds for compensation. The council also includes finance ministers of the states.

Sitharaman said that the Attorney General’s opinion has been received. “We will hold the GST Council meeting only on the difficulty of compensation.” He said that the date of the meeting would be decided soon. Sources said that the Attorney General is of the opinion that the central government isn’t obliged to pay the shortfall of GST compensation money payable to the states. The GST Council has got to find how to form up for the shortfall within the compensation fund. The payment of GST compensation to the states remains an issue after the revenue from cess has been reduced since August 2019.

The middle had to spend on surplus cess collected in 2017-18 and 2018-19 on compensation. Under the GST Act, States are compensated for the primary five years of revenue loss on a bimonthly basis after the implementation of GST from Dominion Day, 2017. The reduction of revenue loss is calculated supported an estimate of 14 percent annual growth in GST collections for 2015-16 as the base year. The four slabs of tax under the GST framework are five percent, 12 percent, 18 percent, and 28 percent.

The very best tax slab attracts cess on luxury or detrimental items. This cess is employed to compensate states for revenue losses. The middle had released GST compensation of Rs 1.65 lakh crore in 2019-20. However, the quantity raised from the cess in 2019-20 was less i.e. Rs 95,444 crore. Compensation payments were Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18.

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Anurag Srivastva
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