The fitment committee under the Goods and Services Tax (GST) Council, comprising central and state officials, has begun a rate rationalisation exercise afresh, checking the possibility of dropping some of the rates, particularly the 12 per cent slab, to achieve a revenue-neutral structure, a senior official with direct knowledge of the matter
The GST Council on Saturday postponed a decision on cutting tax rate on life and health insurance premiums, officials said. The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state counterparts, decided that some more technicalities needed to be ironed out and tasked the GoM for further deliberations.
The GST Council, in its meeting on Saturday, is likely to decide on reducing tax rates on life and health insurance premiums, while hiking it on high-end wrist watches, shoes and apparels, besides considering a separate 35 per cent tax slab for sin goods. The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state counterparts, is likely to discuss rate rejig in about 148 items, besides, it will also deliberate on bringing Aviation Turbine Fuel (ATF), a major component for airline industry's operation cost, in the Goods and Services Tax (GST) fold.
The Goods and Services Tax (GST) Council, scheduled to meet on June 22, could take a call on ending uncertainty on taxing foreign airlines and shippers as regards certain services, a senior official in the know told Business Standard. He said the Council was expected to decide on exempting the services in question from GST - aircraft lease rentals, maintenance, crew salaries, etc. These services are provided by foreign airlines to their Indian operations.
The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, report of the panel of state ministers on rate rationalisation. This will be a physical meeting, which will also discuss correction in duty inversion in certain goods. The 46th GST Council meeting will be held on December 31 in Delhi, an official said, adding that it will be an extension to the pre-budget meeting with state finance ministers on December 30. The Group of Ministers (GoM) on rate rationalisation will submit report to the Council.
The GoM is likely to submit an interim report to the Council on pruning the list of items that at present do not attract the levy.
The 47th GST Council meeting that is currently underway is slated to discuss a host of issues, including a mechanism for compensating states for revenue loss, tax rate tweaks in some items and relaxed registration norms for small online suppliers. Further, the meeting of the Council, chaired by the Union Finance Minister Nirmala Sitharaman and comprising state counterparts, will also clear levying the highest tax of 28 per cent on online games, casinos and horse racing, besides, measures to curb tax evasion, especially devising ways to tackle high-risk taxpayers in GST. "The meeting is being chaired by Hon'ble Union Minister of Finance @nsitharaman and many important decisions are expected to be taken at the meet," PIB Chandigarh tweeted.
If the items and services such selected subsequently pass the test from the fitment committee and the GST Council, this would be the first of such rate hikes, after a series of cuts in the process of rate rationalisation that started in November 2017.
The Centre is looking to convene a meeting of the all-powerful Goods and Service Tax Council in early January. The meeting is likely to focus on rectifying the inverted duty structure for a few more items and will also serve as a platform for pre-Budget discussions between Union Finance Minister Nirmala Sitharaman and state finance ministers, Business Standard has learnt. "The current Winter Session of Parliament ends on December 23, followed by the Christmas-New Year period. "After that we would like to have a meeting of the GST Council, depending on whether there can be a quorum," a top government official said.
The next meeting of the GST Council will be held on September 28-29 in Goa.
He also said GST will take about a year to stabilise.
However, the details will be worked out after the Fitment committee submits its report to the government. It also seeks to continue the thrust of the original budget for the development of agriculture, education, infrastructure in the state. The first supplementary presented by the Orissa finance minister, Prafulla Chandra Ghadai in the state Assembly amid slogan shouting by the BJP members, proposes an outlay of Rs 7587.69 crore (Rs 75.87 billion) for 2008-09.
Dosa batter, custard powder, kitchen lighter may become cheaper under GST
The cess collected on cars as also tobacco and coal will be used to compensate the revenue loss of states by implementing GST.
Ahead of the first meeting of the top decision-making body in nearly eight months, finance ministers of eight states ruled by non-Bharatiya Janata Party and like-minded parties -- Rajasthan, Punjab, Chhattisgarh, Tamil Nadu, Maharashtra, Jharkhand, Kerala and West Bengal -- have devised a joint strategy to press for a zero tax rate on Covid essentials, sources said.
The GST Council, headed by Finance Minister Nirmala Sitharaman and comprising representatives of all states and Union territories, will have its 37th meeting in Goa against the backdrop of economic growth hitting a six-year low of 5 per cent in the first quarter of the current fiscal.
The GST Council is scheduled to meet next on November 10 and may consider lowering tax rates on a host of goods such as handmade furniture, plastic products and daily use items like shampoo.
GST Council extends anti-profiteering authority's tenure, sends rate cut on EVs to fitment panel and also extended the date for filing annual returns under the GST by two months to August 30.
Facing a deepening slowdown, the auto sector is pinning hopes on the GST Council meeting on September 20 for a rate cut from 28 per cent to 18 per cent. However, states including Bihar, West Bengal, Kerala, and Punjab are of the view that the slowdown in the auto sector is not because of the GST rate but structural issues in the economy.
Agriculture implements that are currently taxed up to 18 per cent may come under the 12 per cent or the 5 per cent bracket.
Assembly elections coming up in November and December could offer a window of opportunity to the government to make GST attractive through rate cuts.
The council also cut GST rates on affordable housing to 1 per cent from the current 8 per cent.
The GST Council's agenda includes trimming the number of items in the 28 per cent slab by 75 per cent, easier compliance for assessees and small taxpayers, and a presentation on bringing real estate under GST.
"This rationalisation is 3-4 month exercise," he said, adding that the GST Council decided on the rate cut on the recommendation of a Fitment Committee.
The Council also discussed process to make return filing simpler with just one return to be filed every month.
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