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'GST Council to discuss AG opinion on compensation'

GST Council to discuss AG opinion on compensation
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New Delhi: Finance Minister Nirmala Sitharaman on Saturday said the Attorney General's view on GST compensation was sought after consultation with the states and a meeting of the GST Council would be held to discuss the legal opinion.

The finance minister was responding to a question on apprehensions raised by certain states about the reported AG opinion on GST compensation.

"This matter was discussed in the GST Council meeting when it met last time. Members expressed their views on the matter and it was decided that legal opinion should be taken from AG," Sitharaman told reporters here.

The GST Council, chaired by the Union finance minister and comprising state counterparts, had in March decided to seek views from the AG, who is the chief legal officer of the government, on the legality of market borrowing by the Council to make good the shortfall in compensation fund.

"The opinion has come...we will hold an exclusive GST Council meeting on the issue of compensation," Sitharaman said, adding that the date of the meeting will be decided shortly.

According to sources, the Attorney General has opined that there is no obligation on the central government to pay the GST compensation shortfall to the states and GST Council has to decide on ways to make good the shortfall in compensation fund.

The payment of GST compensation to states became an issue after revenues from imposition of cess started dwindling since August 2019 and the Centre had to dive in to the excess cess amount collected during 2017-18 and 2018-19.

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