News

Published: Feb 24, 2023
Updated: Feb 24, 2023

Entire Rs 16,982 cr GST Compensation Cess to States Cleared by Finance Minister

Finance Minister Nirmala Sitharaman announced on Saturday that the entire GST compensation cess of Rs 16,982 crore for June 2022 will be cleared. This announcement was made following the 49th meeting of the GST Council. The minister also stated that six states that had submitted the accountant general's certificate will receive Rs 16,524 crore.

States Receiving Compensation Cess

Delhi, Tamil Nadu, and Telangana are among the six states that will receive the compensation cess. Although an AG certificate is required to obtain GST compensation, Sitharaman stated that it is not a strict requirement since 90% of the funds are released to the states without it.

GST Council Meeting Highlights

The GST Council meeting, held at Vigyan Bhavan, focused on setting up appellate tribunals and curbing tax evasion in the pan masala and gutkha businesses. The council approved the group of ministers' report on taxation for pan masala and reduced GST on pencil sharpeners and some tracking devices. The council also approved an exemption for coal rejects supplied to and by the washeries.

GST on a specific type of liquid jaggery was reduced to zero if sold loose and labeled, while its tax rate was reduced to 5% if it is pre-packaged. The council recommended a rationalisation of the late fee for filing delayed annual returns.

SUV and MUV Fitment Committee Decision Pending

The fitment committee did not reach a decision on the taxation of SUVs and MUVs. The GST Council also decided to tax services provided by courts and tribunals under the reverse charge mechanism.

GST Appellate Tribunal and GoM Reports

The GST Council accepted the decision on the GST Appellate Tribunal, with language modifications to be circulated within a week. Sitharaman expects to finalize the GoM report on GST tribunals with slight modifications so that it can be included in the Finance Bill by March
1. The GoM's report on online gaming was not discussed at the meeting due to the unavailability of the Chairman, Meghalaya Chief Minister Conrad Sangma, who was occupied with the upcoming Assembly elections in the state.

GoM report to be finalized by the GST council

The Finance Minister cleared the entire GST compensation cess for June 2022 and disbursed funds to the six states that submitted the AG certificate. The GST Council meeting addressed several issues, including appellate tribunals, tax evasion, and taxation on goods and services, with several decisions being made. The GST Council plans to finalize the GoM report on GST tribunals with slight modifications so that it can be included in the Finance Bill by March 1.