Apart from this, she also said that the government will clear the entire pending balance of the GST compensation - a total of ₹16,982 crores for June. "We have announced today that the entire due on the pending balance of the GST compensation will be cleared as of today...In other words, the entire pending balance of the GST compensation - a total of ₹16,982 crores for June - will be cleared," she said while addressing the media after the GST Council meeting.

Though she maintained that the amount is not really available in the compensation fund as of today. However, the government would release this amount from their own resources and the same amount will be recouped from the future compensation cess collection. 

Also Read: Petrol will be brought under GST once states agree: FM

"With this release, the Centre would clear the entire provisionally admissible compensation cess dues for 5 years as envisaged in the GST (Compensation to States) Act, 2017," she said 

Although this amount is not really available in the compensation fund as of today, we have decided to release this amount from our own resources and the same amount will be recouped from the future compensation cess collection. 

Also Read: More pan masala disclosures, but no tax based on capacity

Among other announcements, the FM said that the GST council has decided to reduce the GST rate on liquid jaggery (Raab) from 18% to nil or 5%. Adding on, she said that GST rate will be nil if its is loose, while 5% will be charged if its pre-packaged and labelled.

On pencil sharpeners, the GST rates were reduced from 18% to 12%. Also, there is a reduction in GST on tags tracking devices or data loggers which are affixed on durable containers, from 18% to nil, subject to some conditions, said FM Sitharaman. In addition, the GST council has announced to implement tax on services provided by courts and tribunals under the reverse charge mechanism. The council has announced to provide exemptions on coal rejects provided by and approved to the washeries approved by Council. There will also be GST exemptions for services by the National Testing Agency for conducting entrance examinations for admission to educational institutions.

The government will also rationalise the late fee for delayed filing annual returns. Particularly for GST form 9 from year 2023 onwards.  

In a relief to tax payers falling under lower tax slab rate, FM reduced such late fee for taxpayers with an annual turnover of up to ₹20 Cr.

GST council also approved the change in language in GST Appellate Tribunal. The modified draft will be circulated within a week. The updated government's report on GST tribunals with will be prepared by 1 March and will be included in the finance bill. 

Reactions post GST council meet

- The GST council concluded on two key decisions, ie the formation of GST tribunal and introduction of capacity-based taxation, believes Ankur Gupta Practice Leader- Indirect Tax at SW India.

"Formation of the GST Tribunal as there was a lot of pressure from the industry. It would also help reduce the litigation cases at the high court being the next recourse available as of now after the first appellate level. We might see the final guidelines by the end of next quarter," he added.

He also said the introduction of capacity-based taxation specifically targeting pan-gutka industry will help in curbing the tax evasions due to the unregularized market. "It would be interesting to see if it impacts at customer level because the small retailers were pocketing the entire MRP price without paying any GST on the same. A special compensation scheme will be introduced for such players," said Ankur Gupta.

- Chairman of TIOL Knowledge Foundation, Shailendra Kumar expects the return of MRP-based cess to be a favourable move for the government to increase revenue. 

"Kudos to the GST Council for forging consensus on the much-delayed commission of Appellate Tribunal with some amendments in the structure. So far as the levy on PAN masala & gutka goes, the proven tool of MRP-based Cess has been brought back. With a track & trace mechanism it may yield some extra revenue," said Shailendra.

- Highlighting upon the pile up of huge number of pending cases to be heard by the Tribunal, Vivek Jalan of Tax Connect Advisory calls the decision to form tribunal to be the "need of the Hour".

"The 49th GST Council deliberated on setting up of GST tribunals as per the GOM Report. Thousands of matters have already piled up as pending to be heard by Tribunals in the last five years and the setting up of Tribunals is the need of the Hour from the last two years now," said Vivek Jalan.

"The major issue which was coming in the way was whether the GSTAT would be State Level or National Level. The considerations of 'Independence' and 'federal character' were arguments 'for' a state level tribunal, which being a quasi-judicial Authority has to ensure that the load on High Courts is reduced by unbiased dispensation of justice. However, the considerations of 'Harmonising Jurisprudence', 'Functional Specialisation' and other matters were argued 'for' setting up National Level Tribunals. It seems that the GST Council has largely formed a view on the same with certain changes to the GoM report recommending National Level Tribunal," he added.