GST Council meet today

NEW DELHI: The GST Council will meet here on Thursday to take up the single-point agenda of GST compensation to states affected by delays in the release by the Centre, a government official privy to meeting agenda said.

The meeting was earlier proposed in July, as announced by Union Finance Minister Nirmala Sitharaman after the first GST Council meeting in the backdrop of Covid-19 pandemic in June.

"The Council will meet tomorrow with a single-point agenda to discuss the compensation cess. Any changes in the GST rates or cess structure would also relate to how timely compensation to the states could be released," the official said.

Faced with sharp decline in GST collections due to the nationwide lockdown and disruptions in economic activities across the country, one of the options before the Centre is to pay GST compensation to states by using a portion of its borrowings.

The compensation has not been paid to the states since March. Even the compensation for March was delayed and paid in late July. A legal opinion on the matter sought by the Centre from the Attorney General earlier suggested that the former is under "no obligation to pay GST compensation shortfalls to the states" and it is the GST Council which has to decide on making good the shortfall in the goods and services tax compensation fund by putting sufficient amount into it.

The AG had opined that the GST Council can recommend to the Centre to allow the states to borrow on the strength of the future receipts from the compensation fund, sources said.

It would, however, be for the central government to take a final decision in the matter under Article 293(3) of the Constitution. (IANS)

Also Watch: Working for 15 Years, Not a Single Penny Paid