The 41st GST Council meeting is scheduled to be held on the 27th of August 2020. As earlier announced by the Finance Minister, the 41st GST Council Meetings’s sole agenda will be compensation to States.
With the launch of GST the concept of Compensation Cess was introduced with the objective to compensate the states for any revenue loss on account of implementation of GST. The states have been guaranteed a compensation for five years with a 14% increase every year, presently extended up to 2022.
However, the center has not been able to pay the promised compensation to the states. Also, there has been a shortfall in GST Revenue and Cess Collection due to COVID-19 pandemic.Therefore, in the 40th GST Council Meeting the Council will discuss ways to enhance the collection of cess to compensate the states. We can expect some more goods/services to come under the criteria of GST Compensation Cess in the meeting.
Recently, another issue has become a cause of discussion among the taxpayers and for all the wrong reasons. The 39th GST Council meeting had announced that the GST will be applicable on Net GST Liability and that too with a retrospective effect that is July 2017 but a notification was released on the 25th of August 2020 which states that the effective date of chargeability of interest will be 1/09/2020 which is in contrary to the announcement made in 39th GST Council Meeting. Let us all hope that the Council clarifies the same in its next meeting to be held tomorrow.
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