In a bid to provide comfort to states on the treatment of unsettled IGST, under the goods and services tax regime, the government on December 04 has carved out a special group of ministers (GoM) to deal with the issue. Interestingly, this is the first-ever GoM where the union finance minister will be chairing a panel since the rollout of GST. According to the government circular, the GoM will study the issue of settlement of IGST as on March 31, 2018, in detail
“GoM to examine the status of the amount of IGST remaining unapportioned as on 31st March 2018, as per the extant legal provisions and what action is required to be taken,” the circular reads. The GoM, under the chairmanship of FM Nirmala Sitharaman, has other members from Bihar, Delhi, Pudducherry, Tamil Nadu, Punjab, Odisha, and Chattisgarh.
The move comes after Delhi government deputy chief minister Manish Sisodia met Sitharaman and handed over a written representation saying “The issue was again discussed in the 37th GST council meeting at Goa wherein I had reiterated my concern regarding the revenue loss of Rs 3,202 crore to Delhi because of the decision of the government of India to devolve the funds to the states in accordance with the article 270 of the Constitution of India. My views were also supported by the chief minister of Puducherry who also highlighted the revenue loss of Puducherry on this account. Based on the above discussion, the council decided to constitute a group of ministers to study the issue of IGST settlement as on 31st March and to address any possible dispute arising of the same. I am informed that the constitution of the said GOM is still pending.” Meanwhile, sources also indicated that in the past, unsettled IGST amount has been used to compensate states.