GST Council to discuss revenue position in details during second fortnight of December 2019
Amidst lower than expectation collection through Goods & Services Tax (GST), the Centre has sought suggestions from the States on rates including those of compensation cess and on exemption list beside others for the next GST Council meeting.
According to a statement from the Centre to the States, the discussion on revenue position is critical as lower GST and compensation cess collections have been a matter of concern in the last few months. “The compensation requirements have increased significantly and unlikely to met from the compensation cess being collected,” said the statement.
The 38th meeting of GST Council will take place during second fortnight of the current month. The Council is the apex policy making body for GST related matters where Centre and States have pooled their sovereignty in terms of indirect tax matters. It is headed by the Union Finance Minister. The members of the committee include the Union Minister of State (MoS) in the Finance Ministry and one minister nominated from each of the 28 States as well as the three Union Territories with assemblies.
The Council has sought suggestions, inputs or proposals as regards measures, on compliance as well as rates which would help in augmenting revenue. “Specific suggestions may please me provided on following – review of items currently under exemptions, GST and compensation cess rates on various items, rate calibrations for addressing the inverted duty structure, compliance measures other than those currently under implementation and any other measure to augment revenue,” the statement read.
It has also been said that the next meeting of council will discuss the GST revenue position in details. The Centre and States, both are very much worried about GST Collection so far. After two months of negative growth, GST revenues witnessed an recovery with a positive growth of 6 per cent in November, 2019 over the November, 2018 collections, however, total collection during the year so far is still below the estimate. The GST collection on domestic transactions witnessed a growth of 12 per cent, but on imports it continued to see negative growth at (-)13 per cent
Concerns over delayed payment of compensation cess
The States are concerned about the delay in payment from compensation cess. Last month, West Bengal Finance Minister, Amit Mitra, pointed out that the dues owed to the States and three Union Territories with Legislative Assemblies total about Rs 40,000 crore. According to the GST Act, States and UTs with Assemblies are guaranteed compensation if the GST revenue growth is less than 14 per cent. The amount is paid bi-monthly. This year, States and three UTs were paid Rs 28,000 crore for the June-July period. They are yet to be paid for August-September, which was due in October.
A Committee of Officers from States and Centre has been constituted to make recommendations suggesting revenue augmentation measures. There is a Group of Ministers of States as well to suggest on revenue augmentation measures. It has been said that all the suggestions will be placed before the committee for urgent examination. States have been asked so send their views by December 6.
Source- Business Line.