• 20 Feb 2023 05:57 PM
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GST Council Meeting: See how industry reacts on compensation clearance, rate cut

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Sitharaman said the entire pending balance of the GST compensation cess -- a total of ₹16,982 crore -- will be cleared and "although this amount is not available with the compensation fund as of today, we have decided to release from our own resources and the same amount will be recouped from the future compensation cess collection".

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New Delhi: Union Finance and Corporate Affairs Minister Nirmala Sitharaman during the 49th GST Council meeting, in New Delhi, Saturday, Feb. 18, 2023. (PTI Photo/Manvender Vashist Lav)(PTI02_18_2023_000203A) (PTI)
  • Sitharaman said the entire pending balance of the GST compensation cess, a total of 16,982 crore, will be cleared

Union Minister Nirmala Sitharaman on Saturday said the entire pending dues for the GST compensation cess to the states will be cleared as of today.

Sitharaman said the entire pending balance of the GST compensation cess -- a total of 16,982 crore -- will be cleared and "although this amount is not available with the compensation fund as of today, we have decided to release from our own resources and the same amount will be recouped from the future compensation cess collection".

Apart from this, GST council decision on GST Appellate Tribunal accepted with change in language. The modification in draft will be circulated in next 5-6 days.

"As industry awaits with bated breath, setting up of GST Appellate Tribunals was on top of the agenda for the 49th GST Council meeting held today.

According to the announcements made by the Hon'ble FM in the press conference, it is welcoming to note that the report of GoM has been accepted by the members with slight modification in the language. All changes are expected to be made and incorporated in the Finance bill to be passed shortly. Post that, the exercise of selection and search for technical members would commence. It was also announced that apart from the National bench i.e. principal bench, States would be allowed to set up locational benches which can be for a State or a group of States," said Mahesh Jaising, Partner, Leader - Indirect Tax, Deloitte India

The Madras High Court in 2019, had held that the number of technical members cannot exceed the number of judicial members on the bench. 

"In line with this recommendation, it seems to have been agreed that the GST Tribunals would have 2 judicial and 2 technical members, with only 2 sitting at a point in time Revenue Secretary did also clarify that the threshold is likely to be INR 50 lakhs for a single member bench, any matter over this threshold would be dealt with by a division bench. It has been also decided that the decision on number of State benches across the country would be left to states, and the same may be recommended to the Council for approval. While setting up of Tribunals has seen significant delays, the formula for number of members seems interesting and with equal representation by Centre and State , we seem to be moving in the right direction and these should become a reality soon," he added.

GST rates on Rab or liquid jaggery has been cut to nil from 18 percent earlier if sold in loose form. In case it is pre-packaged, the rate has been cut to five percent.

While, on pencil sharpeners has been cut to 12 percent from 18 percent earlier. The GST on tax trackers has been cut to 12 percent from 18 percent but that is subject to conditions.

"The drive of GST rate rationalisations continue as the GST Council in its 49th meeting has announced a number of rate reductions on pencil sharpeners, tracking devices/ data loggers, raab etc. It has also been decided to allow GST exemption on services provided by the National Testing Agency (NTA). It has been also decided to tax services by Tribunals/ Court under the reverse charge mechanism.Amnesty scheme for return filings and rationalisation of late fees for delayed filing of returns has also been announced," said said Mahesh Jaising, Partner, Leader - Indirect Tax, Deloitte India.

"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 Kumar, Chairman, TIOL Knowledge Foundation.