look news india
An important change has been made in the date of the 57th meeting of ‘GST Council’, the largest policy forum related to the country’s tax structure and business world. According to the official Office Memorandum issued by the GST Council Secretariat of the Union Finance Ministry, due to unavoidable reasons, this meeting will now be held on October 8 at 11 am in the Summit Room of Bharat Mandapam, New Delhi. Earlier this meeting was proposed around 7th and 9th October, but in view of the availability of the finance ministers of the states and administrative reasons, now the new date of 8th October has been officially fixed. In this high-level meeting to be chaired by Union Finance Minister Nirmala Sitharaman, Finance Ministers of all states and union territories, senior bureaucrats and top officials of the Revenue Department will sit face to face and discuss many big economic proposals that will give impetus to the country’s economy.
The agenda of this meeting to be held on October 8 includes many such sensitive and long-awaited issues which will have a direct impact on the pockets of the general public and various business sectors. The major topics coming to the Council’s table for consideration are:
-
GST exemption on health and life insurance: It is possible to discuss the report of the Group of Ministers (GoM) formed on the demand of reducing 18 percent GST on health and life insurance policies to 5 percent for common citizens or making it completely zero for senior citizens.
-
Rate Rationalisation: The existing 4 tier tax slabs (5%, 12%, 18% and 28%) may be reviewed. A consensus may be reached on creating a new standard slab by merging the 12% and 18% slabs or shifting select essential commodities to a lower slab.
-
Review of 28% tax on online gaming, casinos and horse racing: A detailed assessment of the impact of the 28% GST rule imposed on online gaming companies on full face value is likely to be presented before the Council.
-
Rules for decriminalization and arrest: Consideration may be given to limiting arrest powers for minor technical mistakes under GST and simplifying the rules for resolution of tax disputes.
-
Relaxation in Input Tax Credit (ITC) and Refunds: There is a preparation to provide relief in ITC matching rules to small traders and exporters to get timely refund.
There is also a possibility of a long debate in the council meeting regarding the revenue balance between the Center and the states. Back-to-back loans taken to compensate states’ revenue losses during COVID-19 are now nearing completion. In such a situation, the Finance Ministers of the states will give their opinion on whether the compensation cess (Cess) collected on luxury and demerit goods (like tobacco, cigarettes, aerated drinks and big SUV cars) should be continued further or it should be merged into the general tax slab. Opposition-ruled states may strongly demand additional fiscal packages or share in cess revenues to strengthen their local resources and fiscal autonomy.
Easing the compliance burden for micro, small and medium enterprises (MSMEs) and retailers, considered the backbone of the Indian economy, has been one of the priorities of the government. In the meeting on October 8, technical reforms like amendment in the existing limits of composition scheme, nationwide expansion of mandatory biometric Aadhaar authentication to curb fake input tax credit and making the scope of e-invoicing more accessible are likely to be approved. Traders’ organizations in big trading states like Uttar Pradesh, Maharashtra, Gujarat and West Bengal have been demanding for a long time to make the notice and assessment processes completely faceless and transparent, on which the Council can issue concrete guidelines.
Being on the cusp of the festive season, this meeting of October 8 is being considered very special from the consumers’ point of view. If the Council decides to fix the tax anomalies (Inverted Duty Structure) on packaged food items, handicrafts, clothing and home appliances, many essential consumer goods may see a reduction in prices. Additionally, there may also be a churn on the old demand of reducing GST on under-construction properties and building materials (like cement) from 28% to 18% in the real estate sector, thereby bringing down the cost of affordable houses. The eyes of markets and investors across the country are now directly focused on the official statements coming out of Bharat Mandapam on October 8.