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Gross Goods and Services Tax (<keyword id="19951327" type="General" weightage="100" keywordseo="gst" source="keywords">GST</keyword>) collections surged to a <keyword id="19953076" type="General" weightage="20" keywordseo="record-high" source="keywords">record high</keyword> of Rs 2.10 lakh crore in the month of April. The GST collection has also registered a 12.4 per cent year-on-year growth. According to a statement by the <keyword id="19908390" type="General" weightage="20" keywordseo="Ministry-of-Finance" source="keywords" meta.keywordsubtype="org" meta.entityname="Ministry of Finance" meta.hostid="261" meta.entityid="Ministry of Finance">Ministry of Finance</keyword>, the growth was propelled by a robust uptick in both <keyword id="20791652" type="General" weightage="20" keywordseo="domestic-transactions" source="keywords">domestic transactions</keyword>, which rose by 13.4 per cent, and <keyword id="19933566" type="General" weightage="20" keywordseo="imports" source="keywords">imports</keyword>, witnessing an 8.3 per cent spike. After accounting for refunds, the net GST revenue for April 2024 stood at Rs 1.92 lakh crore, showcasing an impressive 17.1 per cent growth compared to the corresponding period last year. The breakdown of April 2024 collections reveals positive performance across various components. Central Goods and Services Tax (<keyword id="20793046" type="General" weightage="20" keywordseo="CGST" source="keywords">CGST</keyword>) recorded collections of Rs 43,846 crore, while State Goods and Services Tax (<keyword id="20025648" type="General" weightage="20" keywordseo="SGST" source="keywords">SGST</keyword>) collections amounted to Rs 53,538 crore. Integrated Goods and Services Tax (<keyword id="20025649" type="General" weightage="20" keywordseo="IGST" source="keywords">IGST</keyword>) collections totaled Rs 99,623 crore, including Rs 37,826 crore collected on imported goods. Additionally, cess collections reached Rs 13,260 crore, which included Rs 1,008 crore collected on imported goods. Furthermore, the inter-governmental settlement process saw the central government disbursing Rs 50,307 crore to CGST and Rs 41,600 crore to SGST from the IGST collected. This resulted in total revenue of Rs 94,153 crore for CGST and Rs 95,138 crore for SGST for April 2024 after regular settlement. During the financial year 2023-24 the total gross GST collection recorded at Rs 20.18 lakh crore, exceeding Rs 20 lakh crore with a 11.7 per cent increase compared to the previous fiscal year. The average monthly collection for this fiscal year, that ended in March 2024 stood at Rs 1.68 lakh crore, surpassing the previous year's average of Rs 1.5 lakh crore. The surge in recent GST collections reflects a positive trajectory for India's economy, underscoring robust domestic consumption and buoyant import activity. The figures bode well for the country's fiscal health and economic recovery efforts, signaling resilience amidst global uncertainties. The Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for a period of five years. (ANI)

GST revenue collection for April 2024 highest ever at Rs 2.1 lakh crore

A total of 13 states have so far decided on their borrowing options to meet their <keyword id="9933255" type="UNKNOWN" weightage="20" keywordseo="gst-compensation-shortfall">GST compensation shortfall</keyword> and almost all have decided to go for the first option proposed by the Centre, source said. Out of the 13, 12 states have opted for the first option, under which the Union government has offered states that they could borrow the shortfall arising out of GST implementation, estimated at Rs 97,000 crore approximately. The amount would be borrowed through issue of debt under a special window coordinated by the Finance Ministry. The first option is to ensure steady flow of resources similar to the flow under <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> on a bi-monthly basis. Under this option, the Centre will endeavour to keep the cost at or close to the G-secs yield, and in the event of the cost being higher, will bear the margin between G-secs and average of State Development Loan yields up to 0.5 per cent through a subsidy. The states which have preferred to opt for this option are Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Meghalaya, Sikkim, Tripura, Uttar Pradesh, Uttarakhand and Odisha. Only Manipur has so far opted for the second borrowing option under which states can borrow the entire compensation shortfall of Rs 2.35 lakh crore, including the Covid-impact portion, through issue of market debt. Six more states -- Goa, Assam, Arunachal Pradesh, Nagaland, Mizoram and Himachal Pradesh -- will be giving their choice in a day or two, said people in the know. A few states have submitted their views to the Chairperson of the GST Council but are yet to decide on the options, according to sources. In the 41st GST Council meeting last month, the Centre had proposed both options, so that a mechanism could be put in place as an exception this year, as Covid-19 disruptions and lower revenue collections have made it difficult for the Centre to meet its obligation on Goods and Services Tax (GST) compensation to states. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-future-retail-ril-irctc-bhel-tata-motors-adani-green-vodafone-idea-godrej-properties-sunteck-realty-and-more/articleshow/78097615.cms">Top stocks to watch— Future Retail, RIL, IRCTC, BHEL, Tata Motors, Adani Green, Vodafone Idea, Godrej Properties, Sunteck Realty and more</a> <a href="https://www.businessinsider.in/india/news/delhi-police-arrests-umar-khalid-connection-with-northeast-delhi-riots/articleshow/78097740.cms">Delhi Police arrests Umar Khalid in connection with Northeast Delhi riots</a> <a href="https://www.businessinsider.in/tech/news/tiktok-owner-bytedance-rejected-microsofts-offer-for-the-apps-us-operations/articleshow/78097018.cms">TikTok owner ByteDance rejected Microsoft's bid for the app's US operations, Oracle reportedly chosen as US 'technology partner'</a>

13 states decide on GST compensation — only Manipur opts for borrowing entire shortfall in one go

The <keyword id="6357307" type="General" weightage="80" keywordseo="central-government" source="Orion">central government</keyword> has released an amount worth Rs 17,000 crore to states and <keyword id="6357801" type="General" weightage="80" keywordseo="union" source="Orion">Union</keyword> territories towards the balance GST compensation for the period April to June 2022. The total amount of compensation released to the States/UTs so far, including thus Rs 17,000 crore, during the year 2022-23 is Rs 1,15,662 crore, the Ministry of Finance said in a statement on Friday. "This is despite the fact that total Cess collection till October 2022 is only Rs.72,147 crore and the balance of Rs. 43,515 crores is being released by the Centre from its own resources. With this release, the Centre has released, in advance, the entire amount of Cess estimated to be collected this year till March-end available for payment of compensation to States," the statement added. This decision was taken to assist the States in managing their resources and ensuring that their programmes especially the expenditure on capital is carried out successfully during the financial year. "Even in May this year, the Central Government had released Rs. 86,912 crores as provisional GST compensation to States for the period Feb-May'2022 despite the fact that there was only about Rs. 25,000 crores in the GST Compensation Fund, by making arrangement of funds of around Rs. 62,000 crores from its own resources," the statement said. Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for a period of five years. For providing compensation to States, Cess is levied on certain goods and the amount of Cess collected is being credited to Compensation Fund. Compensation to States is being paid out of the Compensation Fund with effect from July 1, 2017. In other news, Union Finance Minister <keyword id="2640262" type="General" weightage="80" keywordseo="nirmala-sitharman" source="Orion">Nirmala Sitharman</keyword> has chaired a pre-Budget meeting with the finance ministers of all States and Union Territories today for taking their inputs and suggestions for the upcoming Budget for 2023-24. Besides Sitharaman and state/UT finance ministers, Union MoS for Finance Pankaj Chaudhary and <keyword id="1073554" type="General" weightage="80" keywordseo="bhagwat-karad" source="Orion">Bhagwat Karad</keyword>, secretaries from various arms of the Union finance ministry, Chief Economic Advisor Anantha Nageswaran, among others attended the meeting. The Budget for 2023-24 is likely to be tabled on February 1. Notably, it will be the last full Budget for Modi 2.0 government before the <keyword id="6355187" type="General" weightage="80" keywordseo="lok-sabha" source="Orion">Lok Sabha</keyword> elections to be held in April-May of 2024. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/india-uae-in-talks-for-rupee-dirham-denominated-bilateral-trade/articleshow/95766169.cms">India, UAE in talks for rupee-dirham denominated bilateral trade</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/forex-kitty-grows-for-2nd-consecutive-week-rises-2-54-bn-to-547-25-bn/articleshow/95767390.cms">Forex kitty grows for 2nd consecutive week; rises $2.54 bn to $547.25 bn</a>

Centre releases ₹17,000 cr as GST compensation to States/UTs

<ul><li>M&amp;M, Ashok Leyland and Tata Motors have recovered from their intraday low.</li><li>Gadkari while speaking at a SIAM conference had said that the rising level of pollution is a health hazard for citizens.</li><li>There is no such proposal currently under active consideration by the government, said Gadkari in is clarification</li></ul> The auto index, <keyword id="3540651" type="General" weightage="20" keywordseo="Nifty-Auto" source="Orion">Nifty Auto</keyword>, recovered from its 400 point or approximately 2.5% fall after Union Minister <keyword id="26680" type="General" weightage="50" keywordseo="nitin-gadkari" source="Orion">Nitin Gadkari</keyword> clarified on Tuesday clarified his '10% additional <keyword id="18747014" type="General" weightage="60" keywordseo="GST-on-diesel-vehicles" source="Orion">GST on diesel vehicles</keyword>' comment made earlier in the morning. At the time of updating the story, the index is 1.6% in the red. Auto stocks had fallen sharply after Gadkari said he will seek a "<keyword id="2169429" type="General" weightage="60" keywordseo="pollution-tax" source="Orion">pollution tax</keyword>" in the form of additional <keyword id="6354679" type="General" weightage="80" keywordseo="gst" source="Orion">GST</keyword> of 10% on diesel vehicles and gensets in order to cut down on air pollution. This in turn has dragged the stocks down as most of the commercial vehicles in the country currently run on diesel. At the time of updating, Mahindra and Mahindra is down 1.7% but shown a recovery from the 3.48% slide. Ashok Leyland has now recovered slightly too and is down 2.4% while Tata Motors which had slipped 2.8% is now down 1.8%. The Road and Transport Minister has subsequently clarified his comment on X (formerly Twitter). He said that that there is no such proposal currently under active consideration by the government. <div type="twitter" handle="nitin_gadkari" handlename="nitin_gadkari" favoritecount="0" retweetcount="0" id="1701501884324860043"></div> Earlier, speaking at the 63rd Annual SIAM convention Delhi, the Union Road Transport and Highways Minister said the rising level of pollution is a health hazard for citizens. "I am going to handover a letter to the Finance Minister this evening stating that an additional 10% GST be put on diesel-powered vehicles," Gadkari said. In the passenger vehicle segment, various carmakers including Maruti Suzuki India and Honda have already stopped manufacturing diesel cars. Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market. Terming diesel as a hazardous fuel, he noted that the country has to import the fuel to meet the demand. "Say goodbye to diesel... Please stop making them, otherwise we will just increase the tax so much that it would become difficult to sell diesel cars" Gadkari said. He said he will propose additional GST on diesel-powered generators as well. Automobiles are currently taxed at 28% GST, with additional cess ranging from 1% to 22% depending on the type of vehicle. SUVs attract the highest GST at the rate of 28% along with a compensation cess at 22%. Gadkari also asked the industry to focus on environment-friendly alternative fuels like ethanol. He also asked the industry to focus on green hydrogen. Explained: <a href="https://www.businessinsider.in/policy/economy/news/what-is-ethanol-blending-current-targets-and-challenges-for-india/articleshow/103460113.cms" data-type="tilCustomLink" target="_blank">What is ethanol blending and what are the challenges faced by India</a>

Auto stocks recover after Gadkari clarifies his '10% additional GST on diesel vehicles' comment

New Delhi, Dec 4 () The GST Council meeting scheduled to be held on December 18 is likely to deliberate on raising cess on some more products to meet the growing need of compensation among other issues.
 The meeting of all-powerful GST Council is going to be held against the backdrop of lower-than-expected GST collection.
 The GST Council will deliberate on the matter of GST compensation at its meeting on December 18, Minister of State for Finance Anurag Singh Thakur said on the sidelines 62nd founding day of Directorate of Revenue Intelligence (DRI).
 He also said India's economic fundamentals continue to be strong and that the government would take more steps to revive the economy.
 India's GDP growth slumped to a 26-quarter low of 4.5 per cent in the second quarter of the current fiscal as gross value added to the manufacturing sector contracted for the first time in nine quarters.
 The last time GDP grew at a slower pace was in the fourth quarter of 2012-13, when it had expanded only 4.3 per cent.
 The compensation requirements have increased significantly and are unlikely to be met from the compensation cess being collected.
 This discussion is quite critical as lower GST and compensation cess collections have been a matter of concern in the last few months, according to a letter written by the GST Council to Commissioner, SGST of all states.
 The Council has sought suggestions, inputs or proposals as regards measures, on compliance as well as rates which would help in augmenting revenue.
 "Specific suggestions may please be provided on ... review of items currently under exemptions, GST and compensation cess rates on various items, rate calibrations for addressing the inverted duty structure, compliance measures other than those currently under implementation and any other measure to augment revenue," it said.
 The suggestions made will be placed before the committee for urgent examination, it said.
 The GST Council is headed by Finance Minister Nirmala Sitharaman.
 Earlier in the day, finance ministers and representatives of opposition-ruled states met Union Finance Minister Nirmala Sitharaman and expressed their concern over the delay in the release of GST compensation which has put them in an acute financial position. DP DP MR
MR

GST Council to review revenue position, compensation cess on Dec 18

New Delhi, Feb 12 () Finance Minister Nirmala Sitharaman on Wednesday said inadequate realisation of GST compensation cess is delaying the payment to states and that the Centre was not according any differential treatment to states.The minister also said the government is committed to paying to states as per the provisions of the GST (Compensation to States) Act, 2017.At the time of the introduction of GST, it was agreed that the Centre would compensate states for shortfall in GST collections as per a defined formula."Now, there has been a delay in giving the 14 per cent compensation and we are running late in giving it timely," she said.The delays are because the compensation cess was not adequate to pay up the 14 per cent which was committed, she said, adding, devolution of taxes to states is committed as per the law. "There cannot be any tweaking here. Formula is given by the finance commission and the formula is given by the GST Act...That has nothing to do with me saying, I don't like XYZ state, so, I won't give...But if the revenue collection itself has gone down, of course the portion which goes to states will be lesser," she said at Times Now Summit here. When asked whether the government acknowledges that there is a slowdown in the economy, Sitharaman said the government is not in a denial mode and working on to address concerns of various sectors depending on need.Referring to opposition parties' barbs that the government had so many budgets even after unveiling Union Budget in July 2019, she said: "From July to February, there are people who tell me you presented a Budget every weekend, which means I've been acting on it".However, the minister also quipped she does not use certain jargons and terminology, which people wanted her to use.She further said there is a criticism that the government is in denial mode as it was "not saying" whether the economy is in a cyclical or structural slowdown, or stagflation. "Each one would want me to say the way in which he would want me to say and if I don't, then they say the government is in denial," the minister asserted. Emphasising that there are signs of recovery in some sectors, she said, Goods and Services Tax (GST) collection has consistently been rising since the last three months. Since November, she said, GST collection has seen a growth and the collection has been over Rs 1 lakh crore each in the past three months. This indicates revenue collection has improved. It means that commercial and economic activity is back on its feet, she said, adding, the capital expenditure between April-November has been increased by 22 per cent. In order to raise consumption, she said, the government has increased allocation to PM-KISAN, MNREGA and Direct Benefit Transfer under various heads. Expressing happiness over the RBI's decision to ease Cash Reserve Ratio, Sitharaman said, this will help increase banks lending towards housing, auto and MSME sectors. She said the concerns regarding slump in consumption were being taken care of and the government was taking steps to promote exports. "So the four engines you talk about constantly -- public investment, private investment, private consumption, and exports -- are all being given a push. Otherwise, why would you have green shoots? So the government is acting, revenue is improving," she said. When asked what the government was doing to bring back to the country 72 Indians facing charges of financial irregularities, she said, the government has not stopped pursuing the cases. "These people were happily living in India...and once they knew that the government was after them, they fled the country. "...We're not going to stop at anything else but get them back to the country to face the law of the land. So, they may choose to run away from this country, but they can't run away from the Indian legal system," she added. Asked if Delhi Assembly election result was a setback for BJP, Sitharaman said, "We have not lost Delhi. Delhi was with Aam Aadmi Party...we give out best in every election". While AAP only retained power in Delhi, the vote share of BJP has gone up in Delhi, she emphasised. DP NKD CS DP ANUANU

Payment to states delayed due to low realisation of GST compensation cess: FM

States which failed to submit their options before the <keyword id="3680839" type="PERSON" weightage="20" keywordseo="gst-council-meeting">GST Council meeting</keyword> in October will have to wait for at least two years to get compensation on Goods and Services Tax collection shortfall expected during the transition period, Finance Ministry sources said on Monday. The sources said that such states will have to wait till June 2022 to get compensation dues, subject to the condition that the GST Council extends the cess collection period beyond 2022. This is so because the Council is expected to adopt one of the two options given by the Centre to meet the <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> needs of the states this year. The states which decide against operationalisation of the new <keyword id="9971535" type="UNKNOWN" weightage="20" keywordseo="gst-compensation-formula">GST compensation formula</keyword> will get their dues only to the extent of compensation cess collected in FY21 and distributed in proportion among all states and union territories. The balance shortfall will only be met from the collection of GST compensation cess beyond the five-year transition period that ends in June 2022. This will be subject to GST Council approval to the extension of compensation cess. The GST Council, in its 41st meeting on August 27, 2020, had decided to give its member-states two borrowing options to meet their compensation shortfall and a response time of 7 working days from the formal receipt of the detailed proposal on the options by email. Almost 15 states had submitted their options by September 15 and more have joined since. Option-1 on GST compensation brought before the Council last month allows states to borrow, under a special dispensation from the Reserve Bank of India, a sum of about Rs 97,000 crore shortfall calculated by the Centre that is directly on account of GST implementation. Option-2 allows states to borrow the entire projected GST compensation shortfall of Rs 2,35,000 crore (total shortfall of Rs 3 lakh crore minus Rs 65,000 crore collected as GST compensation cess) for FY21. So far, 21 states/UTs have expressed preference for Borrowing Option-1 proposed by the Centre. With GST Act requiring voting for any resolution regarding an option by at least 20 states, the move is expected to be adopted by the GST Council at its meeting next month. If this option is indeed adopted, all states would be able to move ahead and borrow under the scheme suggested by the Centre to meet their shortfall arising due to GST switchover. If states still opt out, they will have to wait to get full compensation. Among the 21 states/UTs which support the first option on GST compensation are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Tripura, Uttarakhand, and Uttar Pradesh. Manipur, the only state which had earlier opted for Option-2, later preferred to change it to Option-1. A few more states are, also, to give their borrowing option in a day or two. However, some of them like Jharkhand, Kerala, Maharashtra, NCT of Delhi, Punjab, Rajasthan, Tamil Nadu, Telangana, and West Bengal are yet to respond to the GST Council proposal to decide their options. Under the existing GST Act, compensation for shortfall in GST collections over an agreed formula is payable by the Centre for the first five years of the operation of the new tax system from July 2017 to June 2022. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/top-ten-phishing-examples-and-tricks-used-by-companies-to-test-their-employees-cybersecurity-smarts/slidelist/78228072.cms">Top ten phishing tricks that companies are using to test their employees’ cybersecurity smarts</a> <a href="https://www.businessinsider.in/stock-market/markets/news/indian-tech-companies-hcl-tech-wipro-infosys-tcs-share-price-are-green-today/articleshow/78228700.cms">It’s not just the DWS deal, Morgan Stanley's outlook has painted HCL Tech green⁠ — along with TCS, Infosys and Wipro</a> <a href="https://www.businessinsider.in/tech/apps/news/google-hits-back-at-paytm-reiterates-that-repeated-policy-violations-will-lead-to-stricter-actions/articleshow/78229677.cms">Google hits back at Paytm ⁠— reiterates that ‘repeated policy violations’ will lead to stricter actions</a>

States not choosing GST compensation options by October will have wait another two years

The <keyword id="6355040" type="UNKNOWN" weightage="20" keywordseo="GST-Council">GST Council</keyword> will meet here on Thursday to take up the single-point agenda of <keyword id="9025375" type="UNKNOWN" weightage="20" keywordseo="GST-compensation-to-states">GST compensation to states</keyword> affected by delays in the release by the Centre, a government official privy to meeting agenda said. The meeting was earlier proposed in July, as announced by Union Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> after the first GST Council meeting in the backdrop of Covid-19 pandemic in June. "The Council will meet tomorrow with a single-point agenda to discuss the compensation cess. Any changes in the GST rates or cess structure would also relate to how timely compensation to the states could be released," the official said. Faced with sharp decline in GST collections due to the nationwide lockdown and disruptions in economic activities across the country, one of the options before the Centre is to pay <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> to states by using a portion of its borrowings. The compensation has not been paid to the states since March. Even the compensation for March was delayed and paid in late July. A legal opinion on the matter sought by the Centre from the Attorney General earlier suggested that the former is under "no obligation to pay GST compensation shortfalls to the states" and it is the GST Council which has to decide on making good the shortfall in the goods and services tax compensation fund by putting sufficient amount into it. The AG had opined that the GST Council can recommend to the Centre to allow the states to borrow on the strength of the future receipts from the compensation fund, sources said. It would, however, be for the central government to take a final decision in the matter under Article 293(3) of the Constitution. "If there is need for borrowings to meet compensation to the states and who is going to borrow? How we are going to pay for it?" the Finance Minister had said about the Council meeting in June, hinting that the fall in revenues has become a huge cause of concern for the Centre to meet its liability towards the states as per the GST legislation. Under the GST law, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the Goods and Services Tax (GST) in July 2017. The compensation is the difference between actually revenue collected and projected revenue. The projected revenue is revenue growth of 14 per cent for the states per year over the base year 2015-16. As per the GST Act, full compensation to the states has to be paid for a period of five years till FY22 only through the compensation fund that gets its money through the levy of GST compensation cess on a few items. However, with the fund not getting enough collections since August 2019, the GST compensation to the states has been delayed. The Centre is now looking at getting GST Council nod for a mechanism to finance the compensation. The situation vis-a-vis the GST revenue has worsened in April 2020, with several states indicating a shortfall in collections to the tune of 80-90 per cent of the average monthly collections during this time of the year. In fact, Delhi has said its GST collections may end up at a mere Rs 300 crore in April as against a collection of Rs 3,500 crore in the same month previous year. Other states like Tamil Nadu, Assam, West Bengal, and Andhra Pradesh are also facing severe revenue decline due to shrinking economic activities during the Covid-induced lockdown. The problem has continued into May as well. With economic activity and GDP growth projected to remain subdued for most part of FY21, the Centre is looking at all possible means on how it could meet its constitutional obligation of compensating the states for their revenue losses. After February, when the Centre released GST compensation of Rs 19,950 crore for October and November 2019, the Centre has cleared dues for December, January and February only now. In late July, the Centre released Rs 13,806 crore to the states as compensation for their revenue losses in the GST goods regime for March 2020. "The total amount of compensation released for the year 2019-20 is Rs 1,65,302 crore whereas the amount of cess collected during the year 2019-20 was Rs 95,444 crore," a government statement had said. The monthly compensation requirement for the states in 2020-21 is pegged at Rs 20,250 crore, government sources said, which leaves a big gap between what needs to be paid and what is getting collected. Even in FY21, monthly cess collections could be at a low Rs 7,000-8,000 crore, or even lower. According to previous releases of the Finance Ministry, in the FY 2017-18, a total GST compensation cess of Rs 62,611 crore was collected, of which Rs 41,146 crore was released to the states/UTs as GST compensation. In the FY 2018-19, Rs 95,081 crore was collected as GST compensation cess, of which Rs 69,275 crore was released to the states and UTs as GST compensation. As on March 31, 2019, Rs 47,271 crore collected as GST compensation cess remained unutilised after the release of GST compensation to the states and UTs in the FYs 2017-18 and 2018-19. Since the end of August 2019, the central government has started realising the impending precarious position in paying the GST compensation to the states and UTs as the compensation cess requirement was twice of the average monthly cess collection. The sources said that though the GST Council also has the option to either bring in more items under the cess base by expanding the base of GST cess items, or to increase cess rate on the existing items. Any increase in compensation cess on a few items could yield only about Rs 2,000-3,000 crore a year. Therefore, the Council in its earlier meeting also discussed other options like forego full cess compensation, which was increasing @14% per annum, or to go ahead with whatever compensation is available. One more option looked at was to raise the tax rate on items through rationalisation via shuffling of slab rates. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/if-you-have-a-bank-loan-that-you-are-unable-to-pay-restructuring-is-on-its-way/articleshow/77391894.cms">If you have a bank loan that you are unable to pay, restructuring is on its way</a> <a href="https://www.businessinsider.in/finance/banks/news/loan-moratorium-still-ends-on-aug-31-while-supreme-court-gives-the-government-another-week-to-clarify-if-accrued-interest-should-be-waived/articleshow/77758597.cms">Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived</a>

GST Council meet on Thursday to figure out how states will be compensated for delays in payment

<keyword id="6359833" type="General" weightage="20" keywordseo="goods-and-services-tax" source="Orion">Goods and Services Tax</keyword> (<keyword id="6354679" type="General" weightage="100" keywordseo="gst" source="Orion">GST</keyword>) <keyword id="2298" type="General" weightage="20" keywordseo="collections" source="Orion">collections</keyword> in February, 2023 stood at Rs 1,49,577 crore, lower than Rs 1,55,922 crore collected in January. Out of the Rs 1,49,577 crore collected through GST revenue in February, CGST was Rs 27,662 crore, SGST was Rs 34,915 crore and <keyword id="6360947" type="General" weightage="50" keywordseo="igst" source="Orion">IGST</keyword> was Rs 75,069 crore (including Rs 35,689 crore collected on import of goods) while cess was Rs 11,931 crore (including Rs 792 crore collected on import of goods). February's GST collections were marginally higher than December 2022 collections, which were Rs 1,49,507 crore. Monthly GST <keyword id="6398283" type="General" weightage="20" keywordseo="revenues" source="Orion">revenues</keyword> have been more than Rs 1.4 lakh crore for 12 straight months in a row. The government has settled Rs 34,770 crore to CGST and Rs 29,054 crore to SGST from IGST as regular settlement. The total revenue of the Centre and the states after regular settlements in the month of February 2023 is Rs 62,432 crore for CGST and Rs 63,969 crore for the SGST. In addition, the Centre had also released a balance GST compensation of Rs 16,982 crore for the month of June 2022 and Rs 16,524 crore to States/UTs which have sent AG-certified figures for the previous period. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/the-love-for-ready-to-move-in-homes-is-going-up-says-basic-home-loan-survey/articleshow/98332513.cms">The love for ready-to-move-in homes is going up says Basic Home Loan Survey</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/the-lifestyle-of-the-super-rich-rare-whiskey-handbags-watches-amp-more/slidelist/98334667.cms">The lifestyle of the super rich: Rare whiskey, handbags, watches &amp; more</a>

GST collections slide month-on-month to ₹1.49 lakh crore in February

India's biggest tax reform, the <keyword id="6359833" type="General" weightage="20" keywordseo="goods-and-services-tax" source="Orion">Goods and Services Tax</keyword> (<keyword id="6354679" type="General" weightage="20" keywordseo="gst" source="Orion">GST</keyword>), completes its half-a-decade journey on June 30, with many hits and some misses, and also brought about a paradigm shift in use of technology to bring about tax compliance and making over Rs 1 lakh crore revenue collection every month 'a new normal'. A nationwide Goods and Services Tax (GST), which subsumed 17 local levies like excise duty, <keyword id="6355686" type="General" weightage="20" keywordseo="service-tax" source="Orion">service tax</keyword> and <keyword id="6370857" type="General" weightage="20" keywordseo="vat" source="Orion">VAT</keyword> and 13 cesses, was rolled out at the stroke of midnight on July 1, 2017. Under GST, a four-rate structure that exempts or imposes a low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer. Besides, there is a special 3 per cent rate for gold, jewellery and precious stones and 1.5 per cent on cut and polished diamonds. Besides, a cess is levied on the highest tax slab of 28 per cent on luxury, sin and demerit goods. The collection from the cess goes to a separate corpus — Compensation fund — which is used to make up for revenue loss suffered by the state due to GST rollout. GST also represents an unprecedented exercise in fiscal federalism as the Centre and states come together in the GST Council to thrash out modalities for smooth functioning of the relatively new tax regime. The Council has met 47 times so far and have taken measures which made Rs 1 lakh crore <keyword id="4943720" type="General" weightage="20" keywordseo="gst-collection" source="Orion">GST collection</keyword> per month 'a new normal' and on course to take the figure to Rs 1.4 lakh crore every month. As the government releases the June GST collection numbers on July 1, it is widely expected that the collections will follow the past four months' trend and be around Rs 1.4 lakh crore. The collections had touched a record Rs 1.68 lakh crore in April 2022, it had for the first time crossed Rs 1 lakh crore mark in collections in April, 2018. On the 5th anniversary of GST, <keyword id="4336899" type="General" weightage="20" keywordseo="Central-Board-of-Indirect-Taxes-and-Customs" source="Orion">Central Board of Indirect Taxes and Customs</keyword> (CBIC) tweeted "GST subsumed multiple levies and cesses, reduced compliance burden, removed regional imbalances and inter-state barriers, and significantly increased the transparency and overall Revenue collection". Over the past years the Government has been proactively issuing circulars and clarifications to clear doubts regarding taxation under GST and ensure ease of doing business. More recently, the GST Council, in its 47th meeting in Chandigarh, has decided to ease compliance for small taxpayers who supply through the e-commerce platform. Such suppliers, who make only intra-state supplies, need not seek GST registration if their annual turnover is less than Rs 40 lakh in case of goods and Rs 20 lakh in case of supplies. To help tax officers in administration, GST Network, which provides the technological backbone for the indirect tax regime, has been using artificial intelligence and machine learning to dish out newer data and plug revenue leakages. Tax experts, however, seek a simpler structure for Goods and Services Tax, a structure which would ensure seamless flow of input tax credit through the entire supply chain without losses. BDO India Partner and Leader - Indirect Tax Gunjan Prabhakaran said “over the past five years, the GST law has evolved and mitigated several issues faced by the taxpayers through timely clarifications and amendments. "However, the GST Council and the Government should quickly address few other hardships faced by taxpayers in relation to unwarranted and excessive issuance of show cause notices (for reconciliations of financial numbers, grant of registration, etc) and introduce a robust, technology driven single assessment process, which would achieve the twin objective of ease of doing business and remove the cascading effect of taxes". AMRG &amp; Associates Senior Partner Rajat Mohan said in the last five years, GST law has matured at a fast pace. First, the focus was on compliance and technology; sooner than later, it moved gears, and taxpayers were posed to self-regulate the annual filings. "Now it seems the law has entered the next phase whereby litigation needs to be reduced by either replacing ambiguous tax laws or clarifying the practical application of technical issues. Businesses expect the government to resolve all sectoral issues like would BPO/KPO qualify as an intermediary, tax credit for capital expenditure on building, levy of GST on Extra Neutral alcohol (ENA) etc," Mohan said. While the GST administration has moved forward with alacrity, it is still a long way to go to achieve the full potential of GST and make it a true 'good and simple tax'. With petrol, diesel, ATF outside GST, a large part of the economy is still not covered by the indirect tax regime. Inclusion of petroleum products under the GST net, could reduce cost for companies, tax experts say. With emerging technology, there is emergence of newer asset classes like the virtual digital assets (VDA) or cryptocurrency. There is a need for clarity on whether they would be classified as supply of 'goods' or 'services' and what would be the tax rate on them. Tax rate rationalisation is something which would happen sooner or later. Current inflationary concerns may have derailed the plans to tweak rates and GST slabs, but it would eventually be a reality as both the Centre and states need revenues and lesser slabs would mean a simplified tax regime. Besides, the decision makers in the Council too have to work out a solution as state governments, from July 1, 2022, stare at a stoppage of compensation for revenue loss due to GST implementation. When GST was rolled out on July 1, 2017, states were promised a compensation, from the cess fund, for five years if their GST collection falls short of the 14 per cent compounded revenue growth. Most states have sought an extension to the compensation mechanism and a final decision is likely to be taken at the next GST Council meeting in Madurai in the first week of August. Abhishek Jain, Partner Indirect Tax, KPMG in India, said going forward, the Government can consider setting up of Central authority to resolve conflicting AAR judgements across states and consider doing away with anti-profiteering provisions freeing businesses to set prices. "Further, bringing petroleum and electricity under GST ambit will help prevent cascading and ensure further uniformity. Lastly, some checks can also be incorporated on system generated GST notices, so as to avoid any unnecessary harassment of taxpayers," Jain said. 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You Searched For "GST Compensation Cess" and got 10 results

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GST collections slide month-on-month to ₹1.49 lakh crore in February

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