The GST council on Tuesday approved changes to tax rates on some goods and services, while allowing states to issue an electronic bill of lading for the movement of gold and gemstones within the state, officials said. It was the first day of the two-day meeting of the GST council, led by Finance Minister Nirmala Sitharaman, and taking place in Chandigarh.
Let’s take a quick look at the key tips from the first day of the meeting in 10 points.
At Tuesday’s meeting, the GST council accepted the interim report of the group of state finance ministers, led by the chief minister of Karnataka, Basavaraj S Bommai, on tariff rationalization, including correction of the reverse tariff structure and abolition of tax exemption on some points, to simplify the tariff structure.
The Group of Ministers (GvM) had proposed to repeal the GST exemption for a large number of services, including hotel accommodation below Rs 1,000 per day, and replace it with a 12 percent tax.
It also recommended a 5 percent GST levy on room rent (excluding ICU) charged for hospitalized patients where hospital room costs exceed Rs 5,000 per day.
It wanted all postal services except postcards and domestic letters, book mail and envelopes weighing less than 10 grams to be taxed. Checks, loose or in book form, should also be taxed at 18 percent, the government advised.
The government was in favor of repealing the exemption granted to residential businesses by letting businesses.
With regard to the electronic consignment note on the intra-state movement of gold, jewelery and precious stones to combat evasion, the Council recommended that states should be able to decide on the threshold above which the electronic invoice should be made mandatory. A panel of state ministers had recommended the threshold to be Rs 2 lakh and above.
With regard to high-risk taxpayers, a report by a panel of state finance ministers had suggested that high-risk taxpayers be audited after registration under GST, in addition to using verification of electricity bills and bank accounts to identify such taxpayers. .
Meanwhile, states ruled by opposition parties have demanded that either the revenue-sharing formula under the GST regime be changed or the compensation period extended by five years, amid concerns about lost revenue.
The Goods and Services Tax (GST) was introduced on July 1, 2017, and states were assured of compensation for the loss of revenue due to the rollout of GST through June 2022.
The finance minister of Chhattisgarh, TS Singh Deo, said the current formula for dividing the revenues of the GST equally between the Center and the states should be changed, giving a larger share of 70-80 percent to states. Kerala Finance Minister KN Balagopal said the GST state compensation mechanism should be expanded to compensate for the loss of revenue.