Finance Minister Nirmala Sitharaman said that the GST Council will clear all pending dues related to GST compensation to the states today itself. A total of Rs 16,892 crore will be released as compensation dues among 23 states for the month of June, the minister said at a press conference at the end of the 49th GST Council meeting held in Delhi on Saturday.
“We have announced today that the entire arrears of the pending balance of GST compensation will be cleared from today… In other words, the entire arrears of GST compensation – totaling Rs 16,982 crore for June – will be cleared,” Sitharaman said.
Sitharaman said that some pending compensation for the month of June will be paid today itself, even though this amount is not available in the compensation cess kitty.
She said the money would be released from the Consolidated Fund of India and would be replenished later.
Revenue Secretary Sanjay Malhotra, who was present at the press conference, said a further Rs 16,524 crore would be released to the six states after the AG certified figures are available.
The meeting was attended by finance ministers of states and union territories (along with the legislature) and senior officials of the central government and states.
The Finance Minister said that the GST Council will reduce GST on liquid jaggery, pencil sharpeners and some tracking devices.
As per the Goods and Services Tax (Compensation to States) Act 2017, the Center can levy a cess which will be paid to the states to make up for the money lost since the implementation of GST from July 1, 2017.
The switch to GST resulted in huge loss of revenue to many states, for which they are required to compensate for counting five years from July 2017.
Here are the revised GST rates:
1. The rates of pencil sharpener have been reduced to 12 per cent from 18 per cent earlier.
2. Tax Tracker GST rates have been reduced from 18 per cent to 12 per cent, but there are terms and conditions. Services provided by Courts will be charged on Reverse Change Mechanism (RCM).
3. The GST on Raab, a type of liquid jaggery, has been reduced from 18% to nil on loosening. If it is pre-packaged and labelled, the tax rate will be 5%.
4. The Minister said that the Council has decided to rationalize the late fee on delay in filing Annual Return or GSTR9 for small taxpayers with an annual turnover of up to Rs 20 crore.
5. The Council has accepted two reports of the Group of Ministers (GoM). One of which is capacity based taxation on Gutka, Pan Masala and Chewing Tobacco.
6. The second report is on GST Appellate Tribunals with some changes in language. Officials said the language would be revised and a draft would be circulated with the members tomorrow.
7. GST exemption on coal rejects.
8. GST exemption for services by National Testing Agency for conducting entrance examination for admission to educational institutions.
things not discussed
1. Revenue Secretary Sanjay Malhotra said that there has been no recommendation by the Fitment Committee to tax MUVs at par with SUVs.
2. Sitharaman said the GoM report on online gaming has been submitted but Meghalaya Chief Minister Konrad Sangma, the chairman of the GoM, could not attend the meeting due to the state elections.