The 41st GST Council meeting was held today, 27/08/2020, Thursday with the agenda of compensation for loss of revenue arising from the implementation of GST. The 41st meeting of the GST Council was held via video conferencing. In regard to the shortfall in compensation, the Council had consulted the Attorney General if this gap in compensation can be met through the Consolidated Fund of India and he suggested that the compensation cess levy can be extended beyond 5 years. So, there were two options that were presented in the 41st GST Council Meeting to meet the compensation gap:
-
Providing a special window in consultation with RBI to pay the revenue to the states at a reasonable rate of interest after 5 years through the collection of this cess.
-
Compensating the states through borrowings by the states in consultation with the RBI.
Both the options were presented to the states and the states have asked for a seven days time period to think over the proposals and get back. The Council also added that these options will be relevant for the present year only. The situation will be reviewed in the next year again.
CAclubindia
