GST COUNCIL MEET TODAY MAY SEE FIREWORKS OVER REVENUE

The interest on delayed payment of GST will be charged on net tax liability with effect from September 1. The industry had raised concern over recovery of Rs 46,000 crore of unpaid interest

The GST Council meeting on Thursday is likely to be a stormy affair as opposition-ruled states unite to pressure the Centre to give them the promised compensation for loss of revenue arising from the implementation of GST.

The 41st meeting of the Goods and Services Tax (GST) Council, to be held via video conferencing, has just one agenda for discussion -- making up for shortfall in states' revenues, sources said.

The options being explored are market borrowing, raising cess rate or increasing the number of items for levy of compensation cess.

Discussion on correction in inverted duty on certain goods like textiles and footwear is also likely, they said.

The COVID-19 crisis has further compounded the state's fiscal problems.

In a tweet, Kerala Finance Minister Thomas Isaac said, "The solution to GST embroglio is Central Govt to empower GST Council to borrow for meeting the compensation requirement, if necessary through an ordinance, on the strength of future receipts of an extended levy of compensation cess beyond 5 years by an appropriate notification."

Ahead of the meeting, chief ministers of opposition-ruled states got together on Wednesday to devise a common strategy on the issue.