The 55th GST Council meeting held on 21st December 2024 in Jaisalmer, Rajasthan was chaired by Union Finance Minister Nirmala Sitharaman. The committee’s recommendation has been approved by the council suggesting the measures for distinct problems raised by the States concerning the problems related to the IGST settlement and seeking for the committee to conclude the aimed amendments by March 2025.
Various problems have been raised by the states for the settlement of the Integrated Goods and Services Tax ( IGST ), which the GST Council has addressed. Such measures under the GST framework are counted as attempts to rectify the clarity between the Center and States and expedite the distribution of income.
To categorize the IGST money between the Center and States the state has suggested adopting a particular method which is part of this. States address the delays and inconsistencies and assure quick and effective IGST payment.
The suggestions comprise the methods to address the issue of bigger or unallocated IGST balances.
Developing appropriate protocols to concerns with proper credits or unsettled tax flows. Other compensation actions will be furnished before the states who has a lower revenue as a consequence of IGST settlement irregularities. Provisions to ensure that, as planned according to the GST model, the distribution compares with real consumption patterns.
The instructions have been furnished by the States on the way to settle the CGST ( Central GST ) and SGST ( State GST ) obligations using IGST credits. Also, it is cited to address the problems with the mismatches of settlement disparities in cross-utilization. Constant process for settling outstanding transitional credit claims that affect the distribution of IGST.
IGST collects and settlements via the use of audit and reconciliation process is another suggestion. To confirm the integrity of settlements, States will have more access to audit tools and data.
The GST Council’s devotion to solving the problems of the State and making the GST regime stronger is shown by its ratification of the recommendations related to the IGST settlement. To uphold fiscal federalism and strengthen the collaborative nature of the GST framework, these steps aim to create a fair, transparent, and efficient settlement mechanism.
The meeting was attended by Union Minister of State for Finance Shri Pankaj Chaudhary and Revenue Secretary Ajay Seth, in addition to Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, as well as Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana.
