Highlights of the Extended meeting of 42nd GST Council meeting Held on 12th October, 2020.

Looking for the updates of the extended 42nd GST Council Meeting? Here are the most important ones-

Introduction

A continuation meeting to the 42nd GST council meeting was held on 12th October, 2020 under the chairmanship of Finance minister Smt. Nirmala Sitharaman through video conferencing. The Finance Minister clarified in the media briefing that the said meeting was in the continuation of the previous meeting i.e. 42nd GST Council Meeting held on 5th October, 2020 and not to be counted as the 43rd GST Council meeting.

The Extended 42nd GST Council meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance& States/ UTs.

Highlights of the GST Council meeting held on 12th October, 2020

• Finance Minister Sitharaman specifically mentioned that “No consensus has drawn in the last meeting on the issue of borrowing to make up for compensation shortfall.”
• Further she added that “It is for the first time when the Council discussed about the compensation cess to compensate shortfall.
• Earlier, the Center had given two borrowing options to states.”
• The Finance Minister explained that the Centre has issued a borrowing calendar, and if it goes beyond it to borrow, the G-Sec deals used as a benchmark for every other borrowing will go up. This will increase the borrowing costs for the states and the private sector as well.
• Finance Minister Nirmala Sitharaman announced that government employees can avail cash voucher for LTC if they can’t travel due to pandemic.

50-year interest-free loans for states

• FM Nirmala Sitharaman announced 50-year interest-free loans of Rs 1,600 crore for north-eastern states and Rs 900 crore of such loans for Himachal Pradesh and Uttarakhand.
• The amount has to be spent by 31 march 2021.
• Other states will also get Rs 7,500 crore loans in proportion to their share in the Finance Commission evolution.

In the conclusion of the meeting Finance Minister said that “The GST Council has been gracious enough in unanimously agreeing to extend the cess beyond 5 years, to repay the principal and interest of the entire compensation. There is no dispute on this, the entire compensation has to be paid, it will be paid”

Hope this article was helpful. Refer to the topics discussed in the 42nd GST Council meeting.

Also Read: Highlights of 43rd GST Council Meeting