The Centre on Monday said it will tonight release Rs 20,000 crore to states on account of GST compensation dues. Briefing reporters after the meeting of the 42nd GST Council here, Finance Minister Nirmala Sitharaman said the states which received less apportionment of Integrated GST (IGST) for 2017-18, the Centre will next week transfer a cumulative Rs 24,000 crore to them.
On the issue of releasing compensation to the states, Sitharaman said: “This year whatever we have collected till now, Rs 20,000 crore will get disbursed tonight”. The compensation requirement of states between April and July stood at Rs 1.51 lakh crore.
On the issue of IGST, she said excess IGST apportioned to certain states would be retrieved. However, the minister did not mention the amount. Sitharaman said Rs 24,000 crore would be released by the middle of next week to those states which have received less IGST share against their actual dues.
The minister said the proposal to extend GST compensation cess levy beyond 2022 was cleared by the GST Council. “Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap,” an official statement said.
Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss. Finance Secretary Ajay Bhushan Pandey said with effect from January 1, 2021, GST refunds would be paid/disbursed in a validated bank account linked with the PAN and Aadhaar of the registered taxpayer.
The 42nd meeting of the GST Council, chaired by Union Finance Minister and comprising state counterparts, also eased compliance burden for small taxpayers with an annual turnover of less than Rs 5 crore by allowing them to file GST returns on a quarterly basis with monthly tax payments from January 1, 2021. “Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35 per cent of the net cash tax liability of the last quarter using an auto-generated challan,” the statement added.
Pandey said the Council has also approved the revised requirement of declaring HSN (Harmonised System of Nomenclature) Code for goods in invoices and in sales return Form GSTR-1 with effect from April 1, 2021. Taxpayers with a turnover of over Rs 5 crore will have to quote 6 digit HSN or tariff code, while taxpayers with aggregate annual turnover up to Rs 5 crore will have to quote HSN code up to 4 digits for B2B supplies of both goods and services.
Further, to encourage domestic launching of satellites particularly by young startups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd and NSIL has been exempted from Goods and Services Tax (GST) by the Council.
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