After an inconclusive GST meet, finance minister 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.
From January 1, small taxpayers will not be required to file monthly returns, announced an official from the Finance Ministry. Taxpayment can be made by them monthly via a challan, added the official.
From the first of January onwards, the taxpayers whose annual turnover is less than Rs 5 crore will not be required to file monthly returns i.e GSTR 3B and GSTR1. They will only file quarterly returns said the official.
Earlier today, the GST panel had increased borrowing limit of Rs 1.1 lakh crore instead of Rs 97,000 crore in the first borrowing limit to states. The council has approved extension of the GST compensation cess levy beyond 2022.
Thematics of Impasse
In September, the Centre had given the states two options- either borrow Rs 97,000 crore from a special window facilitated by the Reserve Bank of India or Rs 2.35 lakh crore from the market. Opposition ruled states are yet to accept either of the two options and are vehemently pushing for a third option, while maintaining that the onus is on the centre to make up for the shortfall in revenue collection.
Dispute redressal Mechanism
Terming the two options as a “Threat” whereby, they (opposition states) might not be compensated if they do not choose either of the two options. The states are batting for a dispute redressal mechanism within the council and for a Vice Chairman to be added to the council.
Government’s estimates have pegged the GST compensation requirement at around Rs 3 lakh crore this year, while the cess collection is expected to be around Rs 65,000 crore — an estimated compensation shortfall of Rs 2.35 lakh crore (assuming a 10 per cent revenue growth over last year).