GST Council writes to states telling them compensation cess collections in last few months has been ‘matter of concern’

Finance ministers and representatives of opposition-ruled states on Wednesday met Union Finance Minister Nirmala Sitharaman and expressed their concern over delay in release of GST compensation which has put them in an acute financial position. Now reports have surfaced saying that the GST Council has written to states telling them that the GST and compensation cess collections in the last few months has become a “matter of concern”.

According to Indian Express, the GST Council chaired by the Union Finance Minister and comprises the Minister of State for Finance/ Revenue and finance ministers of all states, has written to states telling them that the compensation requirements are “unlikely to be met”. The Centre has already delayed compensating states for the shortfall in GST revenues for August-September, payment for which was due in October. At least five Opposition-ruled states/UTs – Kerala, West Bengal, Delhi, Rajasthan and Punjab, had issued a joint statement on November 20 raising concerns about this.

The Indian Express report states that, GST Council has now asked states to give their inputs and proposals regarding review of items under exemption, GST and compensation cess rates on various items, rate calibrations for inverted duty structure, compliance and revenue augmenting measures by December 6.

The finance ministers of Delhi, Punjab, Puducherry and Madhya Pradesh and representatives Kerala, Rajasthan, Chattisgarh and West Bengal attended the meeting over delay in payment of compensation. Speaking to reporters after the meeting, Punjab Finance Minister Manpreet Singh Badal said, August and September compensation has not been released to states. So far state have not got compensation for the month of August and September and post December 10, compensation for the period October-November will also be due.

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