Key highlights of 41st GST Council meeting

The 41st GST Council meeting was held under the Chairmanship of Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman by means of video conferencing on the 27th of August, 2020. Shri Anurag Thakur and Finance Ministers of States and UTs and Senior officials from Union Government and States were available in the gathering.

What were we anticipating from 41st GST Council Meeting?

• Issues includes state compensation and therefore GST rates revision.
• Issues for example, meeting compensation gap to state/revenue shortfall.
• GST rate cut for Two-wheeler industry.
• Finance Ministry to look at if the sin tax applies to soft drinks.
• Issues, for example, the Center ought to acquire from the market and give to states as it will get a lower rate and easier across the market . All the more thus, since Center needs to make good on its guarantee to states for paying the due compensation.

Highlights of 41 GST Council:-

1. States were given two options to make up for their revenue shortfall amid the Covid-19 pandemic.
• To provide a special borrowing window to states, in consultation with the RBI, to provide Rs 97,000 crore at a "reasonable" interest rate, and this money can then be repaid after 5 years by extending cess collections.
• To meet the entire GST compensation gap of Rs 2.35 lakh crore this year itself after consulting with the RBI
2. States will also be given a further relaxation in FRBM of 0.5% points for market borrowing.
3. States Seek Seven Days To Consider Cess Option
4. The Attorney General is of the view that compensation needs to be paid to states for five years. But this compensation gap has to be met from the levy of cess only.
5. This is not the appropriate time to talk about increases in tax rates.
6. Data analysis: About Rs 3 lakh crore would be the need for compensation to be paid to states while compensation cess collected would be Rs 65,000 crore. April-July compensation is around Rs 1.50 lakh crore