Union Finance Minister Nirmala Sitharaman addressed a press conference on Monday ahead of the Goods and Services Tax (GST) Council meeting that she is scheduled to chair today at 4pm.
Sitharaman announced proposals on consumer spending and capital spending. On consumer spending, he announced proposals in two components: the LTC cash voucher program and the special festival advance program.
Here’s everything you need to know about the License Travel Grant (LTC) cash voucher scheme:
(1.) Employees of the central government obtain a travel license concession in a block of four years: one for each destination of their choice and city of origin or two for the city of origin.
(2.) Accordingly, the air or train fare is refunded according to the scale of payment / entitlement. In addition, a ten-day vacation charge is paid (salary + shortage allowance).
(3.) However, employees will not be able to make use of LTC in the 2018-21 year block due to the ongoing Covid-19 pandemic. This is where the LTC will benefit government employees.
(4.) In lieu of an LTC during 2018-21, employees will receive a cash payment. There will be a full payment in the license fee and the fee will be paid according to three slabs, depending on the right class. Also, there will be no taxes on paying fees.
(5.) An employee who opts for this scheme will have to buy goods and services worth three times the rate and once the leave charge, and do so before March 31, 2021.
(6) The money will be spent on goods that attract a GST of 12% or more and only digital payments will be allowed. Additionally, employees will need to provide a GST invoice.
(7.) The finance minister said that the scheme would cost Rs 5,675 crore if the central government employees opt for it. However, for PSB and PSU employees, their cost would be Rs 1.9 billion.
(8.) Sitharaman further projected that with even 50% of states opting for this scheme, the government expects to infuse Rs 9,000 crore into the economy.
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