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The Times of India
The Times of India
National
Vibhor Mohan | TNN

Punjab finance minister thanks GST council for clearing state’s compensation

CHANDIGARH: Punjab finance minister Harpal Singh Cheema on Saturday thanked the GST Council for deciding to clear the entire pending balance GST compensation for June 2022, adding that Punjab would get Rs 995 crore as the pending balance.

The relief to the state comes ahead of the Punjab's budget for 2023-24 likely to be presented in the first week of March. Meanwhile, Punjab has also been demanding that the GST compensation regime should be extended.

After participating in the 49th GST Council meeting held under the Chairpersonship of Union Minister for Finance Nirmala Sitharaman in Delhi, Cheema also expressed gratitude towards the GST Council for accepting the state’s demand of lowering GST on pencil sharpeners from 18 percent to 12 percent.

He said that this decision would provide some relief to students and their parents. Punjab had earlier opposed the proposal of considering the GST on pencil sharpeners at 18 percent instead of the existing slab of 12 percent at the 48th meeting of the GST Council held through video conferencing on December 17.

On the issue of the GST Tribunal, Cheema said that the power should be given to the states to strengthen the federal structure of the country rather than establishing the Appellate Tribunal at the national level. He said that every state has its own challenges. “Instead of forming a tribunal at the national level, each state should have its own tribunal so that issues related to GST can be resolved better and faster”, he added.

He further added that the selection of the state member for the tribunal should also be decided by the state. He said that the state government would study the final draft amendments to the GST laws for its comments.

Punjab’s demand that the GST on scrap should be brought down from 18% to 5 % was not taken up in the meeting. The state’s argument is that most of the scrap comes from the unorganised sector and that is the reason for pilferage.

As per the recommendations of the GST Council, the Centre has decided to clear the entire pending balance GST compensation of various states, amounting to Rs 16,982 crore for June. 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, Centre would clear the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act’2017.

“The release of pending GST compensation for June, 2022 has become possible due to persistent efforts made by the Punjab government,” said Cheema.

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