Delhi (India), February 19, 2023: The 49th meeting of the GST Council was held in New Delhi on Saturday, February 18, where Finance Minister Nirmala Sitharaman announced that all pending dues of GST compensation to states will be cleared today itself.
The funds will be released from the consolidated fund of India and recouped later. A total of Rs 16,892 crore will be released among 23 states as compensation dues, according to revenue secretary Sanjay Malhotra.
Once AG-certified figures are available, another Rs 16,524 crore will be released to six states. Tamil Nadu is expected to receive Rs 4,233 crore as part of this clearance.
The GST Council also discussed rate rationalization decisions. Rates on Rab or liquid jaggery have been cut to zero from 18 percent earlier if sold in loose form.
In case it is pre-packaged, the rate has been cut to five percent. Rates on pencil sharpeners have been cut to 12 percent from 18 percent earlier, and rates on tax trackers have been cut to 12 percent from 18 percent, but that is subject to conditions. Services provided by courts will be charged through the Reverse Change Mechanism (RCM).
The Council also accepted two reports from the Group of Ministers (GoM)—one on the capacity-based taxation of gutka pan masala and chewing tobacco and the other on the GST Appellate Tribunals (GSTATs). The modification to the language of GSTATs will be made, and a draft will be circulated tomorrow with the members.
The Council also discussed the tax treatment of MUVs on par with SUVs. However, as the time was short, the officers of the fitment committee could not arrive at any recommendations and required more discussions. The report on online gaming and the law of the land to tax an aggregate value of 28 percent will continue until a new mechanism is in place.
