Lok Sabha Question No. 810 (UNSTARRED), answered on 2022-02-07
Subject: 46th Meeting of GST Council
Ministry: FINANCE
Asked by: Y. S. Avinash Reddy, Su Thirunavukkarasar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA UNSTARRED QUESTION NO. 810

## TO BE ANSWERED ON MONDAY THE 07 TH  FEBRUARY 2022/18 MAGH, 1943 (SHAKA)

## 46 TH Meeting of GST Council

810. Shri. Y.S. Avinash Reddy: Shri. Thirunavukkarasar SU:

Will the Minister of Finance be pleased to state:

(a) whether the 46 th meeting of Goods and Services Tax (GST) Council was held recently;

(b) if so, the details thereof along with the issues that came up for discussion in the said meeting;

(c)  whether  the  demand  for  rate  hike,  correction  of  inverted  duty  structure,  reduction  and rationalization  of  GST  rates  of  some  products  and  services  and  bringing  of  online  food  delivery operators under the purview of GST have also been discussed therein;

(d) if so, the details thereof along with the action taken by the Government thereon;

(e) whether the State Government of Tamil Nadu has requested the Union Government to release its share of revenue and tax dues; and

(f) if so, the action taken by the Union Government thereon and if not, the reasons therefor?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE SH. PANKAJ CHOUDHARY

(a)  to  (d) The  46 th meeting  of  Goods  and  Services  Tax (GST)  Council  was  held  on  31.12.2021 under the chairpersonship of the Union Finance & Corporate Affairs Minister. The agenda pertained to the issue of inverted duty structure in textile sector. The GST Council has recommended to defer the  decision  to  change  the  rates  in  textiles  recommended  in  the  45 th GST  Council  Meeting. Consequently, the existing rates in textile sector would continue beyond 1 st January, 2022.

(e) to (f) As per provisions in Goods and Services Tax (Compensation to States) Act, 2017, GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to all States including  Tamil  Nadu.  However,  the  economic  impact  of  the  pandemic  has  led  to  higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess. GST compensation of ₹ 11,248 crore has been released to Tamil Nadu to partly meet the compensation payable for the period April' 2020 to March' 2021 as the amount in GST Compensation Fund was not adequate to meet the full compensation requirement.

As per the decision of GST Council, ₹ 1.1 lakh crore for FY 2020-21 & ₹ 1.59 lakh crore for FY 2021-22 has been released to States/ UTs as back to back loan to meet the resource gap of the States/UTs due to shortfall in GST compensation. This arrangement has been finalized after detailed deliberations  with  the  States  and  all  the  States  have  opted  for  this  arrangement.  The  quantum  of funds released to Tamil Nadu as back to back loan was ₹ 6,241 crore for FY 2020-21 and ₹ 8,095 crore  for  FY  2021-22.  Release  of  this  amount  has  been  front  loaded  during  the  financial  year  to enable States/UTs to undertake capital expenditure. In addition, depending on the amount available in the Compensation Fund, Centre has also been releasing the regular GST compensation to States to make up for GST revenue shortfall. Centre is committed to release full GST Compensation to the States/UTs as per GST (Compensation to States) Act, 2017 for the transition period by extending the  levy  of  Compensation  cess  beyond  5  years  to  meet  the  GST  revenue  shortfall  as  well  as servicing the loan borrowed through special window scheme. Total compensation released so far to Tamil  Nadu  from  the  Compensation  Fund  is  ₹  29,934  crore  and  back  to  back  loan  released  is ₹ 14,336 crore.

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