17 December, 2019
Syllabus subtopic: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.
Prelims focus: about salient features of GST, GST Council: structure and mandate
Mains focus: concerns of the states regarding delays in compensation payments and the challenges faced by the govt. in GST collections
News: The Centre released Rs. 35,298 crore to the States in Goods and Services Tax (GST) compensation on Monday, just two days before a crucial meeting of the GST Council.
The decision comes at a time when several States had urged the Centre to transfer the compensation payments, which have been pending for several months, with the Punjab government warning that it was prepared to take the issue to the Supreme Court.
Why was there a delay in transfer?
The delay was because GST collections had been lower than expected.
While the government had budgeted for Rs. 6,63,343 crore in GST collections for the current fiscal, 2019-20, it had garnered only about 50% of its budget estimate in the first eight months.
Concerns raised by the states
States have expressed apprehensions about not getting their compensation on time or at all, with some alleging that they had to incur debts to meet the expenses predicated on GST compensation monies.
While the Congress government in Punjab had threatened to take the Centre to court, Chhattisgarh Chief Minister Bhupesh Baghel had asked the Centre to consider extending the cutoff date for compensation, according to sources.
About GST Council:
The GST Council is set to hold its next meeting on December 18.
As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: -
Mandate of GST Council
It shall make recommendations to the Union and the States on:
How does the council take a decision on any tax issue?
Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles-
Will absenteeism of any state or vacancy/ies halt the decision of the council?
No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of—
Is there any provision for resolving the issues arising among the different parties of the council?
The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute —
Source: The Hindu
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