The GST Council on Saturday cleared the compensation due to states up to June-end, the last month of the five-year compensation period, with the release Rs 16,982 crore, of which Bengal will get Rs 823 crore.

The council also reduced the GST rates on liquid jaggery, pencil sharpeners, and certain tracking devices. Briefing media after the 49th meeting of the GST Council, Union finance minister Nirmala Sitharaman said: “We have announced today that the entire dues on the pending balance of the GST compensation will be cleared as of today... In other words, the entire pending balance of the GST compensation — a total of Rs 16,982 crore for June — will be cleared.”

She said: “Since there is no amount in the GST compensation fund, the Centre decided to release this amount from its own resources and the same will be recouped from the future compensation cess collection. With this release, the Centre would clear the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act’2017.”

The finance minister said: “In addition, the Centre would also clear the admissible final GST compensation to those six states that have provided the revenue figures as certified by the accountant-general of the states amounting to Rs 16,524 crore.” The states were Delhi, Karnataka, Odisha, Puducherry, Tamil Nadu and Telangana.

Rate changes

Sitharaman said the panel has recommended a reduction of GST rate on Rab (liquid jaggery) from 18 per cent to nil if sold loose and 5 per cent, if pre-packaged and labelled. For pencil sharpeners, the duty has been reduced to 12 per cent from 18 per cent. It also decided that if a tag-tracking device or data logger is already affixed on a container, no separate IGST would be levied on the affixed device and the ‘nil’ IGST treatment available for the containers would also be available to them. Another important decision includes extending exemption benefit covers on coal rejects supplies to and by coal washeries.

The GST council has adopted the report of the group of ministers on the setting up of GST Appellate Tribunal with certain modifications and accepted the GoM’s recommendation on the mechanism to curb tax evasion in pan masala and gutkha business. The council adopted the report with certain modifications. The final draft amendments to the GST laws will be circulated to members for their comments.