The GST Council at its 42nd meeting on Monday decided to extend the levy of compensation cess beyond the transition period of five years for such period as may be required to meet the revenue gap.
Nirmala Sitharaman announced that Compensation cess collected this year, amounting to Rs 20,000 crore, will get disbursed to all states tonight. The main point of contention- decision on pending GST compensation to states has been deferred.
The council will meet again on October 12 to iron out the differences.
The Centre decided to release ₹45,000 crores of GST dues to States by next week to help them meet immediate spending needs amid the pandemic.
This includes ₹20,000 crores of GST compensation cess collected so far in 2020-21, which Ms Sitharaman said will be disbursed to States by late Monday night itself.
The Karnataka appellate authority consisting of Judicial Member, D P Nagendra Kumar and Accountant Member, M S Srikar said that the ruling given by AAR wherein 18 per cent GST applicable on whole wheat parota and Malabar parota is void ab initio on the grounds that it was vitiated by the process of suppression of material facts.
The finance minister also said that FY21 cess collected so far, worth Rs 20,000 crore, will be disbursed tonight.
The Council also extended the GST compensation cess beyond 2022. However, on the issue of borrowing options to meet revenue shortfall, there was no consensus.
