Union Finance Minister Nirmala Sitharaman on February 18 announced a slew of decisions taken during the 49th GST Council Meeting held earlier in the day.
Among the key announcements, Sitharaman in her media briefing said that the entire pending goods and services tax (GST) compensation of Rs 16,982 crore to the states for June 2022 will be cleared.
"With this release, the Centre would clear the entire provisionally admissible compensation cess dues for 5 years as envisaged in the GST (Compensation to States) Act, 2017," Sitharaman said, adding, "Although this amount is not really available in the compensation fund as of today, we have decided to release this amount from our own resources and the same amount will be recouped from the future compensation cess collection."
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During the press conference, the minister also said that decision on GST Appellate Tribunal was accepted with change in language. The modification in draft will be circulated in next 5-6 days. According to a government source to Moneycontrol, the final report on such a tribunal will be passed by the finance minister by early March.
Apart from this, the Council also decided to revise tax rate cuts of some items.
Here is a lowdown on the decisions:
- The Council decided to reduce GST on pencil sharpeners and certain tracking devices, as well as announced to implement tax on services provided by courts and tribunals under the reverse charge mechanism.
- On certain type of liquid jaggery (Raab), the GST Council reduced tax to nil from 18 percent if its loose. If its pre-packaged and labelled, the tax rate on this will be 5 percent.
- Further, extension to exemption on coal rejects supplied by and to the washeries was approved was by Council, while the Group of Minister (GoM) report on taxation for pan masala was accepted. The GoM did not prescribe capacity based levy but suggested compliance and tracking measures. The report suggested that the exports of such commodities be allowed only against a letter of undertaking with consequential refund of accumulated input tax credit. The compensation cess levied on such commodities will be now changed from ad valorem to specific tax based levy to boost the first stage collection of the revenue.
- Additionally, FM announced that there will also be GST exemptions for services by the National Testing Agency for conducting entrance examinations for admission to educational institutions.
- The GST Council also recommended rationalisation of late fee for delayed filing of annual returns. As a relief to taxpayers, the Council relaxed late fees for filing GSTR 9 to 0.02 percent of turnover for those taxpayers with a turnover of up to Rs 20 crore. The FM said late fee for annual returns up to 5 crore is Rs 25 per day.
- The Council received no recommendation for fitment committee for sport utility vehicles (SUVs) and multi utility vehicle (MUVs).
The report of the panel of ministers on Goods and Services Tax (GST) on online gaming and casinos did not come up for deliberation. Sitharaman stated that GoM report could not be taken up in today’s meeting as the chair of the GoM, Meghalaya chief minister Conrad Sangma, was unable to attend the meeting because of the elections in his state.
GST on millet-related items was discussed but no decision was arrived at in the Council meeting.
The Goods and Services Tax was introduced in the country with effect from July 1, 2017 and states were assured for compensation for loss of any revenue arising on account of the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for a period of five years.
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