‘Single-agenda’ GST Council meet next month to decide compensation for states

Sandeep Dikshit
Tribune News Service
New Delhi, June 12

The GST Council decided to defer crucial decisions on compensating states for their IGST dues and on correcting the inverted duty structure on some products to a later date after intense discussions that spanned four hours on Friday.

On the all-important question of giving states their due share in GST, a special one-agenda GST Council meeting will be held next month to discuss compensation cess, which has to be given to states. The special meeting will also discuss who should pay for the borrowing if there is a shortfall, Union Finance Minister Nirmala Sitharaman told the media after the meeting.

“ Understanding the need for states to have money in their hands, we corrected one end of the anomaly, wherein Centre could release money and give to states without states having to do any adjustment. This enabled us to clear the GST compensation bills of December, January and February, which have been lying pending. States have appreciated the decision to sort this matter out,” said the Minister.

The GST Council also decided to defer a decision on duty inversion structure in three sectors—textiles, fertilisers and footwear.

“While every Minister agreed with the logic but there was a bit of discussion. The question is when do we want to rationalise the rates? While the need to relook the duty structure was agreed upon, a decision has been postponed. The discussion happened on textiles. The other two items did not come up for discussions,” she said.

The GST Council decided to entrust the task to a Group of Ministers headed by Bihar Deputy Chief Minister Sushil Modi.

The GST Council agreed on certain relief to GSTR-3B returns and to small taxpayers. It waived the late fee for those with no tax liability but have not filed GST returns from July 2017 to January 2020. It capped at Rs 500 the late fee for those with tax liability for the same period. This will apply to all returns submitted between July 1 and September 30.

Further relief is being offered to small tax payers for late filing of returns for the Covid-period of February, March and April. For small tax payers whose aggregate turnover is up to Rs 5 crore, the rate of interest for late furnishing of GST returns is being reduced from 18 per cent to 9 per cent.

Tax payers who could not get cancelled GST registrations restored in time are also being given an opportunity to apply for revocation of cancellation of registration up to September 30. This will apply in all cases where registration has been cancelled till June 12.