Page 49 - GSTL_ 28th May 2020_Vol 36_Part 4

2020 ] NEWS DESK J109
The GST (Compensation to States) Act, 2017 also provides for the impo-
sition of Cess up to the rate of 15 per cent. ad valorem (based on estimated value)
on “any other supplies”.
Kerala, for instance, started levying 1 per cent. cess on GST for two years
from August 1, 2019, on the value of goods and services taxed at 12 per cent.,
18 per cent. and 28 per cent.
When contacted, Himanta Biswa Sarma, who is the Finance Minister of
the BJP-led NDA Government in Assam, said “the situation is not so appropriate
for any Cess”.
“The industry is not in a mood to absorb any Cess now. The mood is
low, and there are already pay-cuts, retrenchments and so on,” said Sarma, who
is a member of the GST Council.
The Minister, however, pointed out that a proposal to levy Cess on “sin
goods” - alcohol and tobacco products - could be considered. “You can consider
additional Cess, may be in 6-7 months,” he said.
Sarma also said that the “situation is improving”, as the GST collection in
his State “is going up from 20 per cent. during the full lockdown to 50 per cent.
now and is expected to go up to 80 per cent. next month”.
“There’s a loss of one quarter, and to cover that we should make use of
other monetary instruments, such as borrowing, increase in WMA (Ways and
Means Advances), overdraft,“ etc., provided the Central Government pays the
devolution funds,” Sarma said. Last month, the RBI announced a 60 per cent.
increase in the WMA limit of State Governments.
Asked about the proposed move, Kerala Finance Minister Thomas Isaac
said : ‘The States are not able to collect the GST, how can there be an additional
Cess?”
According to Isaac, the only way out is to lean on the fiscal deficit and
take back concessions given to the corporate sector. “The Centre should borrow
from the RBI to provide funds to States,” he said.
Meanwhile, sources indicated that the next GST Council meeting would
be convened only after the Centre has prepared a response to the States’ demand
for pending compensation.
Union Finance Minister Nirmala Sitharaman had said earlier this week
that GST compensation is due for all the States for the four-month period from
December to March.
[Source : The Indian Express, New Delhi, dated 23-5-2020]

GST Analytics wing to identify risky suppliers to exporters
The C.B.I. & C. has asked GST risk management wing to conduct supply
chain analysis to identify risky major suppliers to exporters and share it with
jurisdictional field officers.
The Central Board of Indirect Taxes (C.B.I. & C.) had received represen-
tations from exporters saying in some cases the Integrated GST (IGST) refunds
are getting delayed by over 6 months.

GST LAW TIMES  28th May 2020  49