Special meeting in July to discuss state compensation, says Nirmala Sitharaman

GST council meeting 2020: Sitharaman said the Goods and Services Tax (GST) council will discuss borrowing to compensate states and who will pay it back.

Published on: Jun 12, 2020, 16:08:39 IST

Hindustan Times, New Delhi | By Anonymous

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Union finance minister Nirmala Sitharaman said on Friday a meeting will be held next month to exclusively discuss compensation to states.

Union Finance Minister Nirmala Sitharaman chairs the GST Council meeting through video conferencing, from her office at North Block in New Delhi, Friday, June 12, 2020. (PTI)

Sitharaman said the Goods and Services Tax (GST) council will discuss borrowing to compensate states and who will pay it back.

“In July, which is on the request of all the ministers, there shall be a meeting to discuss exclusively one agenda point - compensation cess. The compensation which has to be given to the states and if at all it results in some kinds of borrowing. How and who is going to pay for it,” The minister said.

The decision was taken during the 40th GST council meeting over video conferencing for the first time after the lockdown clamped to prevent the spread of the coronavirus disease (Covid-19).

Nirmala Sitharaman also said that registered entities with zero Goods and Services Tax (GST) return filing and who have not filed their returns between July 2017 and January 2020 will not be charged any late fees.

“For the period from July 2017 to January 2020, which is prior to the Covid period, a lot of return filing has been pending. For all those who have no tax liabilities but who have not filed their returns between July 2017 to January 2020 there will be zero late fees,” she said.

“For people who have a tax liability, a maximum late fee for non-filing of GSTR-3B returns for period July 2017 to January 2020 has been capped to Rs 500. This will apply to all returns submitted during July 1, 2020, to September 30, 2020,” Sitharaman said.

Small taxpayers with turnover up to Rs 5 crore will now pay a reduced rate of interest of 9% from 18% for returns filed for February-April 2020 post July 6, if filed by September 30, the minister announced.

She added that they can file returns for May to July till September 2020 and no late fee will be charged.

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