GST Council Meeting Today: The GST Council will meet on December 31, Friday at 11 a.m. The meeting will be chaired by Finance Minister Nirmala Sitharaman. Among other things, the council will discuss the report of the panel of state ministers on tariff rationalization. This will be a physical meeting, in which the correction of the excise inversion for certain goods will also be discussed. The 46th GST council meeting will be held in Delhi, an official told PTI. The Group of Ministers (GvM) on tariff rationalization reports today to the Council. The panel assessed items with a reverse tax structure to minimize refunds payout.
What’s on the agenda for the GST Council Meet Today?
The GST Council is likely to discuss, among other things, the increase in taxes on footwear and textiles.
According to a government notice, all shoes, under Rs 1000, will attract a VAT rate of 12 percent. On the other hand, all ready-to-use textiles, except those made with cotton, will also attract a GST of 12 percent. Previously, these items were sold at a 5 percent GST rate.
State governments and trade organizations have demanded a postponement of this increase, arguing that a number of small businesses will be affected. They have also warned that the move will be a curse for the poor, who will eventually be unable to afford clothing, which is one of life’s basic necessities.
In addition, the GST Council also discusses the report of the Group of Ministers (GvM) on tariff rationalization. In its report, the panel recommended ways to minimize refund payments.
It has also made many sweeping recommendations to the GoM regarding changes to the pastes and rates and the removal of items from the exemption list. Currently, GST is a four-level plate structure of 5, 12, 18 and 28 percent. Essential items are either exempt or taxed on the lowest plate, while luxury and value items draw the highest plate. At the top of the highest plate, a tax is levied on luxury and value goods.
What states want?
Former West Bengal finance minister Amit Mitra has urged the Union’s finance minister to roll back a proposed increase in textile production from 5 percent to 12 percent.
Telangana Industries Minister KT Rama Rao has also urged the Center to withdraw its proposed plan to increase GST rates. The industry has also resisted the five percent tax hike, citing higher compliance costs, especially for the unorganized sector and MSMEs, in addition to making the poor’s clothes more expensive.
Apart from this, several states have demanded that the GST compensation cessation scheme be extended for another five years and that the Union Government’s share of the centrally sponsored schemes be increased, as the COVID-19 pandemic impacted revenue. GST compensation to states for lost revenue due to the inclusion of local taxes such as VAT in the unified national Goods and Services Tax (GST) will expire in June next year.
Opposition-ruled states including Delhi, West Bengal, Tamil Nadu, Kerala, Chhattisgarh and Rajasthan have made this requirement. “Many states have requested this. We also asked for the GST compensation to be extended. If it is not extended, the finances of many states will be in a bad state,” Delhi deputy chief minister Manish Sisodia said Thursday after the states’ finance ministers’ pre-budget meeting with Sitharaman.
(with PTI inputs)
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