"We'll discuss if market borrowing is needed to sort the issue and if yes, how should it be done," Finance Minister Nirmala Sitharaman said after the GST Council meeting.
The government is planning to have a single-point Goods and Services Tax (GST) Council meeting in July on compensation cess, which has been a bone of contention between the states and the Centre.
"In July, we'll have a one-point agenda meeting on GST compensation cess. We'll discuss if market borrowing is needed to sort the issue and if yes, how should it be done," Finance Minister Nirmala Sitharaman said after the GST Council meeting.
In March, Sitharaman had said the GST Council would examine the legal implications of borrowing from the market to meet the shortfall in funds to compensate states for their GST revenue loss and ensure that states’ guaranteed revenue growth of 14 percent year-on-year is protected.
GST collections for March dipped sharply, as the central government's GST collection dropped 87 percent year-on-year. The due date for payment of tax is June-end.
Faced with dismal collection and extended deadline for filing returns, the government refrained from releasing the monthly GST revenue collection figures for April and May.
Last week, the central government had released pending compensation payment to states amounting Rs 36,400 crore for November-February for 2019-20.
The 40th GST Council meeting decided that those who have no tax liabilities but who have not filed their returns between July 2017-January 2020, there will be no late fees. For the period from July 2017 to January 2020, which is prior to the COVID-19 period, a lot of return filings have been pending.
For those who have tax liability, maximum late fee for non-filing of GSTR-3B returns for period July 2017 - January 2020 has been capped to Rs 500. This will apply to all returns submitted during July 1, 2020 - September 30, 2020.
For small tax payers whose aggregate turnover is up to Rs 5 crore, the rate of interest for late furnishing of GST returns for February, March and April 2020, beyond July 6, 2020, the rate of interest was reduced from 18 percent to 9 percent.
Small taxpayers will have to pay no interest for late furnishing of GST returns till July 6, 2020. After that, the interest rate has been reduced to 9 percent, and this would be valid till September 30, 2020.
Small taxpayers whose aggregate turnover is up to Rs 5 crore will be provided a waiver of late fees and interest if they file the form GSTR-3B for the supplies affected in months of May, June and July 2020, by September 2020 and no late fee or interest would be charged.
On the inverted duty structure, especially for textiles, Sitharaman said while the principle regarding correction of inversion of duties was agreed upon by everybody, the question of the right time to make the correction remained, so a decision on the same has been postponed.Follow our coverage of the coronavirus crisis here