The finance ministry is working on a detailed mechanism that could resolve goods and services tax (GST) disputes raised by states while avoiding distortions in the tax regime. The mechanism could be discussed with the states at the next GST Council meeting, expected in June.
The plan includes a Dispute Resolution bench with representation from the states, the Center, and independent legal and tax professionals knowledgeable in legal and economic implications. There will be detailed guidelines on which cases can be referred to such a process. The need for such a mechanism also follows a recent Supreme Court decision that GST Council recommendations are not binding on the states or the Center.
The May 31 Center said it has released all the GST compensation due to the states by May 31, 2022. The finance ministry said in a statement that the government has released an amount of 86,912 crores to the state’s GST compensation payments.