GST

Finance Minister Nirmala Sitharaman announced that the next Goods and Service Tax Council meeting will be held on May 28, via Video Conferencing due to the current pandemic situation. The announcement was made by the finance minister in a Twitter post on Saturday. “Smt Nirmala Sitharaman will chair the 43rd GST council meeting via video conferencing at 11 AM in New Delhi on 28th May 2021,” the Twitter post revealed. 

There is a gap of six months since the last meeting, following the rising demands of the state finance ministers, even from West Bengal and Punjab. This week, Bengal finance minister Amit Mitra had written to finance minister Nirmala Sitharaman stating the urgency of conducting the GST Council meeting.  The meeting was called to discuss the demanding issue of increasing the compensation of Rs. 1.56 Lakh crore issued for states in FY22.

As per the projection of the Government of India, without taking consideration of the Covid-19 pandemic, the shortfall was expected to be around Rs 1,56,164 crore in 2021-22. Now due to the sudden pandemic of Covid-19, the compensation will be much higher than it was earlier projected. 

The centre had also provided a constant source of loans to the states amounting to Rs. 1.1 Lakh crores to make up for the GST Compensation shortfall of FY21. In the month of March, the finance ministry stated that a compensation of Rs. 63,000 crores were pending to states and Union Territories in accordance with the GST Compensation shortfall in FY21.

The Punjab finance minister had some other important matters to be discussed in the GST Council regarding the pandemic situation. It would be on whether GST would be exempted from the pandemic commodities and essentials such as hand sanitizers, gloves, face masks, PPE Kits, ventilators, oximeters and temperature check instruments. The issue of cut interest rates is also a topic of discussion. 

Apart from the possible inclusion of petroleum products under GST to ease the tax burden, other state matters such as 5% GST on covid vaccines are to be discussed in the virtual meet. This meeting has been made possible because the elections are out of the way, and the new government is taking charge. 

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