Kerala has asked the Centre to release soon the Goods and Services Tax compensation arrears due to States, Finance Minister T.M. Thomas Isaac has said.
Briefing reporters about the deliberations at the GST Council here on Friday, Dr. Isaac said the arrears for March, April and May had not yet been released. This should be devolved immediately, he said.
Since the GST compensation cess collected by the Centre was inadequate to share the compensation due to States, the GST Council should avail itself of loans and extend the five-year time frame fixed for collecting the cess so that it could repay the loans. This was the demand Kerala made at the meeting, Dr. Isaac said.
The meeting decided to hold a session by mid-July. All States were told to submit their proposals to the council before the meeting, he said.
Shortfall in revenue
The State’s revenue collection had increased from ₹390 crore in April to ₹690 crore in May, but the revenue shortfall was huge when compared to the previous years. The council discussed a proposal for hiking the tax on textiles, footwear, and fertilizers which had an inverted duty structure. But many States, including Kerala, opposed the proposal and it was put off.
The concessions granted in late fee and interest for delayed filing of tax returns by traders with a sales turnover of less than ₹5 crore, in view of the COVID-19 crisis, has been extended up to September. The concessions granted for filing the returns of February, March and April had been extended to May, June, and July too, he said. Concessions in late fee had also been granted for those had not filed returns between July 2017 and January 2020.An amnesty scheme had been announced for defaulters.
No late fee
No late fee would be collected from nil return filers. The maximum late fee for others had been reduced from ₹10,000 to ₹500.
This benefit would be available from July 1. Those filing returns before September 30 could avail themselves of the benefit.
