GST Council meet: Rs 20,000 crore compensation cess to be released tonight, says Sitharaman

Finance Minister Nirmala Sitharaman on Monday said that this year's collection of Rs 20,000 crore as compensation cess will be disbursed to states tonight. Rs 24,000 crore Integrated GST will be released to those states that received less earlier due to anomalies, Sitharaman also said at the 42nd GST Council meeting. The states will receive the funds by the end of next week.

Sitharaman said that the Council has deferred the decision on the mode of payment of pending GST compensation share of the states to October 12. Nearly 20-21 states chose the first option given by the government that involved states borrowing to cover the compensation shortfall, FM said. Other states that did not choose any option wanted the central government to borrow and pay the shortfall, she noted. "GST Council has also decided to extend compensation cess beyond June 2022," the finance minister added.

"10 states demand that full compensation should be paid to the states during the current year as per clauses in the law and centre should borrow. Decision was postponed to the next meeting on 12th of October," Kerala finance minister Thomas Isaac said.

"From the first of January onwards, the taxpayers whose annual turnover is less than Rs 5 crores will not be required to file monthly returns i.e GSTR 3B and GSTR1. They will only file quarterly returns," Finance Secretary Ajay Bhushan Pandey said.

Meanwhile, in the last meeting in August, Pandey had said that the total shortfall in collection of GST was estimated at Rs 2.35 lakh crore. of this, Rs 97,000 crore was on account of GST shortfall, while the rest due to coronavirus pandemic.

Also read: GST Council meet: How to compensate states for revenue loss?