The 41st GST Council meeting was held today, 27th August 2020, Thursday with the agenda of reimbursement for loss of revenue arising from GST implementation. The 41st meeting of the GST Council happened via video conferencing. Concerning the shortfall in compensation, the Council had consulted the Attorney General if this gap in payment can be met through the Consolidated Fund of India. He suggested that the compensation cess levy can be extended beyond five years. So, two options were presented in the 41st GST Council Meeting to meet the compensation gap:

1. To provide a separate window in consultation with RBI to pay the revenue to the states at a reasonable rate of interest after five years through the collection of this.
2. Offering reimbursement to the states through borrowings by the state governments in consultation with the RBI.

Both the options were offered to the states, and the states have asked for seven days to think over the proposals and get back. The GST Council also added that these options would only be admissible for the current year.

What were people expecting from the 41st GST Council Meeting?

• Issues such as compensation and revision in the GST rates of the states.
• The concern of meeting the compensation gap to states/revenue shortfall.
• The cutback in the GST rates for Two-wheeler industry
• Finance Ministry examines if the sin tax applies to soft drinks provided to states as it will get a lower rate and easier access to markets.