GST Council meet: Payment to states okayed, taxes cut on liquid jaggery, pencil sharpeners, tracking devices

Finance Minister Nirmala Sitharaman on Saturday announced that the GST Council has given its approval to clear Rs 16,982 cr balance of compensation to states. Further, the Council reduced the GST on liquid jaggery, pencil sharpeners, and certain tracking devices

The proposal to reduce GST on cement has not come to the fitment committee yet.

"We have announced today that the entire due 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," the Union minister said.

"Although this amount is not really available in the compensation fund as of today, we have decided to release this amount from our own resources and the same amount will be recouped from the future compensation cess collection," she added. With this release, the Centre would clear the entire provisionally admissible compensation cess dues for 5 years as envisaged in the GST (Compensation to States) Act, 2017.

The Council approved the reduction on GST rate on rab from 18% to nil or 5%. Rab is a kind of liquid jaggery which is so typical to Uttar Pradesh & other jaggery-producing states. The rate is nil if it is loose. If it is pre-packaged and labelled, it will be 5%, the FM said.

A reduction in GST on tags, tracking devices or data loggers which are affixed on durable containers, from 18% to nil, subject to some conditions, was also announced. The GST on pencil sharpeners has been reduced to 12% from 18%.

The GST council's decision on GST Appellate Tribunal was accepted with a change in language. The modification in the draft will be circulated in the next 5-6 days.

The Council has recommended rationalisation of penalties for late filing of annual GST returns.

The announcement came after FM Nirmala Sitharaman chaired the 49th meeting of the Goods and Services Tax (GST) Council, in Vigyan Bhawan, New Delhi on Saturday. The 48th Meeting of the GST Council was held on December 17, 2022, through video conference.

At the last meeting, the GST Council had recommended decriminalising three different types of offences, including the tampering of material evidence. They pertain to obstructing or preventing any officers in the discharge of his duties, deliberate tampering of material evidence, and failure to supply information. Also, GST rates on pulses husk and knives were reduced from 5 per cent to nil.

Goods and Services Tax was introduced in the country with effect from July 1, 2017 and states were assured for 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.