The meeting of the GST Council is going to be held in Chandigarh on 28-29 June. In this meeting, states with opposition parties like West Bengal, Kerala, Chhattisgarh can create a ruckus for the demand for continuation of compensation.
Jagran Bureau, New Delhi. In the upcoming GST Council meeting to be held in Chandigarh on June 28-29, the opposition parties may create a ruckus over the demand for continuation of compensation. States like West Bengal, Kerala, Chhattisgarh have already demanded the central government to continue with their compensation. The period of compensation given to the states is ending on June 30 this year and now the states will stop getting the compensation, which has been announced by the council’s chairman and finance minister Nirmala Sitharaman in the earlier GST Council meeting.
According to sources, the final decision will be taken by the GST Council on whether the states will continue to get compensation from July this year, but it is certain that the states would like them to continue to pay the compensation. The main reason for this is also that due to taking additional loans during the Corona period, many states can take a very limited amount of loans in the current financial year 2022-23.
During the implementation of the GST system in the month of July 2017, it was decided that for the next five years, the loss to the states due to the abolition of VAT would be compensated by the central government in the form of compensation amount. To compensate for this, additional cess was imposed on many items like tobacco, cigarettes, expensive bikes and cars.
However, the cess in the name of compensation will continue till March 30, 2026. In the last two financial years, due to non-recovery of cess to compensate the states and the huge reduction in GST collection due to Corona, the central government took loans in the name of the states to the tune of Rs 1.1 lakh crore and Rs 1.59 lakh crore. paid to the states.
Now the Center will continue to collect compensation cess for the repayment of this loan. The Center says that all the arrears of compensation till May 31 this year have been paid to the states. The report of the Group of Ministers will also be presented in the meeting of the GST Council to be held after six months under the chairmanship of the Finance Minister. The Group of Ministers was constituted to rationalize the GST rates for various items.
According to sources, a decision can be taken in the council meeting to impose GST at the rate of 28 percent on items like casino, lotteries, race courses, online gaming. At the same time, a decision can be taken to impose GST on many services outside the purview of GST. GST rates for many items used for hand and foot operation can be reduced. But increasing the GST rates on many items to rationalize the inverted duty structure does not seem feasible at the moment. Due to rising inflation, this will not be possible now.