GST Council to meet in Srinagar on June 28, 29

NEW DELHI: The 47th meeting of the Goods and Services Tax (GST) Council will be held in Srinagar on June 28 and 29,  Finance Minister Nirmala Sitharaman said. The meeting was originally scheduled for April, but due to her other commitments, it had to be rescheduled for next month.

The issue of compensation is likely to be discussed at this meeting, as many non-BJP states are pushing for an extension of the GST compensation mechanism, which provides states with five years of aid for losses incurred as a result of the GST tax, is set to expire next month. The Centre has paid the states GST compensation until the end of May, leaving only the June payment to be made. The Centre spent $103 billion on it.

The compensation issue would be raised during the conference by finance ministers from the opposition-led Kerala, West Bengal, and Chhattisgarh, as well as Tamil Nadu and Bihar, a state government run by PM Modi's supporter. After the Supreme Court declared last month that the GST Council's judgments are non-binding, states are feeling more confident in taking on the federal government. If Sitharaman rejects the demand, the states will be free to earn revenue through other means, rendering the GST's single nationwide tax a farce.

The opposition-controlled states accuse Modi's government of consolidating authority at the federal level, despite his claims that he wants them to practise "cooperative federalism." The GST court decision helps to alleviate the situation.

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