Friday, October 30, 2020
No menu items!

Temporary retention of GST cess pending reconciliation not diversion: Finance Ministry sources

Must Read

Mahathir says remarks on French attacks taken out of context

The feedback by the previous Malaysian chief Mahathir had been in response to calls by Muslim nations to...

Meerut conmen dupe several with promise of riches from Aladdin’s lamp

In an incident that reminds how human greed is past motive, two individuals have been arrested in Meerut...


Time taken in reconciliation of compensation receipts can’t be termed as diversion of GST cess fund when the dues to states had been totally launched by the Central authorities, sources mentioned.

 

Finance ministry sources have countered CAG audit finding of Central authorities wrongly retaining ₹ 47,272 crore of GST compensation cess meant for states, saying non permanent retention can’t be termed as diversion.

Days after the Comptroller and Auditor General (CAG) flagged that the Centre in first two years of the GST implementation wrongly retained GST compensation cess that was meant for use particularly to compensate states for loss of income, ministry sources mentioned compensation due for the yr 2017-18 and 2018-19 was totally paid to states.

Also Read | Cess pool: On CAG report of Centre’s accounts

Time taken in reconciliation of compensation receipts can’t be termed as diversion of GST cess fund when the dues to states had been totally launched by the Central authorities, they mentioned.

Sources mentioned that in 2017-18, ₹62,611 crore was collected, out of which the federal government launched full compensation dues of ₹41,146 crore to the States and Union Territories (U.T.s).

In 2018-19, an quantity of ₹ 95,081 crore was collected, out of which ₹ 69,275 crore was paid as full compensation dues to states and UTs.

They mentioned an quantity of ₹47,271 crore collected within the 2017-18 and 2018-19 had remained unutilised for reconciliation publish full fee of GST compensation dues.

For the yr 2019-20, the central authorities launched ₹1,65,302 crore as GST compensation in opposition to a cess assortment of ₹95,444 crore which it may accomplish that with the unutilised cess of ₹47,271 crore.

Also Read | Govt. did not check out GST system earlier than rollout: CAG

The GST (Compensation to States) Act ensures all states an annual progress price of 14 per cent of their GST income within the first 5 years of implementation of GST starting July 2017. It was launched as a reduction for states for the loss of revenues arising from the implementation of GST.

If a state’s income grows slower than 14%, it’s imagined to be compensated by the Centre utilizing the funds particularly collected as compensation cess. To present these grants, a GST compensation cess is levied on sure luxurious and sin items.

The collected compensation cess flows into the consolidated fund of India (CFI), and is then transferred to the Public Account of India, the place a GST compensation cess account has been created. States are compensated bi-monthly from the accrued funds on this account.

However, as a substitute of transferring the complete GST cess quantity to the GST compensation fund throughout 2017-18 and 2018-19, the CAG discovered that the Centre retained these funds within the CFI and used it for different functions.

The finance ministry sources mentioned the compensation receipt within the CFI was topic to reconciliation within the coming months, as normal, within the forthcoming monetary yr.

Also Read | CAG factors irregularities in GST evaluation & assortment by Gujarat govt.

If for that cause the quantity remained within the CFI, how can that be handled as diversion, they requested including even the CAG in its report has not mentioned so.

The quantity collected beneath compensation cess fund has been often and totally distributed to states as per their dues and budgetary provisions and by the tip of July 2020, all the things has been accounted for and launched, supply added.

The CAG in its report tabled in Parliament earlier this week mentioned out of the ₹62,612 crore GST Compensation Cess collected in 2017-18, ₹56,146 crore was transferred to the non-lapsable fund.

In the next yr (2018-19), ₹54,275 crore out of ₹95,081 crore collected was transferred to the fund.

The brief switch in 2017-18 was ₹6,466 crore and in 2018-19 it was ₹40,806 crore, the CAG mentioned including the Centre used this cash for “other purposes” which “led to an overstatement of income receipts and understatement of fiscal deficit for the yr“.

Sources defined that every one quantities together with taxes and cess which can be collected by the Centre ought to, beneath the Article 266 of the Constitution, get credited first to the CFI after which solely it might be transferred to some other fund by means of a price range head in Union Budget.

The authorities makes all efforts to switch all quantities collected by the tip of each monetary yr into the fund by making needed price range provisions, they mentioned.

In case of compensation cess, because the remaining accounts of quantities collected are identified solely after the tip of monetary yr, any quantity collected over and above the estimate will stay within the CFI briefly, they mentioned including after reconciliation, the quantity is transferred to Compensation Fund and from that fund to states as per their compensation formulation.

Therefore, such non permanent retention of GST cess in CFI pending reconciliation can’t be handled as diversion by any stretch of creativeness, sources mentioned.

Since the cess collected by the Government has been used for full fee of due compensation, then it can’t be alleged that unutilized cess quantity has been diverted for different functions, they insisted.



Source link

Latest News

Mahathir says remarks on French attacks taken out of context

The feedback by the previous Malaysian chief Mahathir had been in response to calls by Muslim nations to boycott French merchandise. Former Malaysian...

Meerut conmen dupe several with promise of riches from Aladdin’s lamp

In an incident that reminds how human greed is past motive, two individuals have been arrested in Meerut for allegedly duping folks with...

ISL 2020-21 Schedule Out: SC East Bengal vs ATK Mohun Bagan in Kolkata Derby on Nov 27

Indian Super League 2020-21 fixtures of the primary 11 rounds of matches are out  with the seventh version of the highest league in the...

FAU-G Wants to Fill PUBG Mobile Void, But Can it Have the Same Impact on Gamers?

FAU-G, the upcoming Indian shooter recreation, made headlines as it premiered on the heels of massively fashionable battle royale recreation PUBG Mobile being...

More Articles Like This