Finance Minister, Nirmala Sitharaman chaired 40th GST Council meeting today and will hold a press briefing at 12.45 pm to announce outcomes of the meeting. This is the first meeting post-coronavirus-induced lockdown among GST council members. It is expected that many issues have been discussed in the meeting that took place for 1 hour via videoconferencing among GST council members.
In the meeting, it is most probable that the effect of lockdown on tax revenue of States and compensation payout framework for States has been discussed. GST members also have brainstormed on the methods for revenue increase and waiver of late fee for the period from August 2017 to January 2020, review GST compliance data, etc. Also, there may not be any GST rate cut announcement as it can be an obstruction to the much-needed funds in state government’s coffers.
On March 14, 2020, when the previous council meeting was held, FM Sitharaman had said that the Centre will examine the legality of GST Council borrowing from market to meet the compensation requirements. With the States demanding to raise the compensation, the resorting to market borrowing were discussed to meet the revenue guarantee to states.
Under GST law, states were guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017.