GST Council meet: No decision on extending GST compensation to states

With two years being lost in the pandemic, states have sought an extension of this compensation mechanism.

Published: 29th June 2022 04:26 PM  |   Last Updated: 30th June 2022 07:56 AM   |  A+A-

Union Finance Minister Nirmala Sitharaman chairs the 47th GST Council meeting in Chandigarh

Union Finance Minister Nirmala Sitharaman chairs the 47th GST Council meeting in Chandigarh. (Photo| PTI)

Express News Service

NEW DELHI: The GST Council has left the elephant in the room untouched as no decision was taken on extending the period of GST compensation cess despite call for the same by as many as 13 states. 

Meanwhile, the Council directed the Group of Ministers (GoM) on casino, race course and online gaming to re-examine the issues in its terms of reference based on further inputs from states and submit its report shortly. 

Finance Minister Nirmala Sitharaman while briefing media on GST Council’s decisions said few states want the compensation scheme to be extended by at least a few years, if not another five years. A final decision in this direction will be taken in the Council’s next meeting on July 18.

“We incurred huge losses in the last two years due to the Covid pandemic. We need compensation cess to make up for the losses,” Rajasthan Minister Shanti Dhariwal told reporters after the meeting got over. Meanwhile, Tamil Nadu Finance Minister Palanivel Thiaga Rajan stated that every state including those being ruled by Bharatiya Janata Party (BJP) has asked for extending the compensation scheme.

When GST was introduced in 2017, the Centre had committed to compensating states for five years till June 30, 2022, for incurring losses due to new regime subsuming various state levies. In addition, the decision of imposing taxation of 28% on online gaming, casinos and lottery has been deferred. The GoM has been asked to re-examine the issues and submit the fresh report by July 15. GST Council will meet in the first week of August again to decide on this issue particularly. 

While, the GoM headed by the Meghalaya Chief Minister Conrad Sangma, recommended that there shouldn’t be any difference between the game of skill and game of chance, Finance Minister Nirmala Sitharaman said that the Goa Finance Minister is of the view that casinos should be treated differently than online gaming, horse racing and lottery. As per the GoM report, 28% should be levied on all activities like casinos, online gaming and lottery. 



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