10 states demand that full compensation should be paid to the states during the current year as per clauses in the law and centre should borrow. Decision was postponed to the next meeting on 12th of October.
The Government of India will disburse Rs 24,000 crore Integrated GST—which is divided equally between the Centre and states—to those states that recieved less due to anomalies, the finance minister said.
Such states will receive the amount by the end of next week.
Sitharaman said that this was a long-pending issue waiting to be resolved. Difficulty arose on how to get the money back from states that had received more IGST than others.
The finance minister said they did not intend to take the states' money back, but it is something that will be done gradually.
From Jan. 1, taxpayers will less than Rs 5 crore annual turnover will not be required to file monthly GSTR-1 and GSTR-3B returns. Instead, they will now do it on a quarterly basis.
However, since States need money monthly, a taxpayer can pay 35% of the tax paid in the previous quarter in first two months of a quarter and pay the entire tax due in the third month, Revenue Secretary Ajay Bhushan Pandey said.
These taxpayers will be required to be file only eight returns annually.
The GST Council has deferred a decision on the mode of payment of pending GST compensation share of the states to Oct. 12.
Finance Minister Nirmala Sitharaman said that about 20-21 states chose the first option given by the Centre that involved states borrowing to cover the compensation shortfall.
Other states that did not choose any option wanted the Centre to borrow and pay the shortfall instead, Sitharaman said.
