46th GST Council meeting on 31st December: Members to discuss rate rationalization, cloth hike

New Delhi: Finance Minister Nirmala Sitharaman will chair the 46th meeting of the Goods and Services Tax (GST) Council on Friday, December 31 in Delhi. The members are expected to discuss the report of the panel of state ministers on rate rationalization, proposed GST hike in textiles, among others.

Members will meet in person to discuss improvements to duty inversions in certain items. The meeting will be an extension of the Finance Minister’s pre-budget meeting with state finance ministers on December 30.

The Group of Ministers (GoM) on rate rationalization is expected to submit a report to the Council. The panel was tasked to review items under the inverted fee structure to help reduce refund payments.

In addition, the fitment committee has proposed several recommendations to the GoM regarding changes in slabs and rates. The committee, which includes tax officials from states and the Centre, has also recommended exclusion of certain items from the exemption list, PTI reported.

For those people, GST is a four-tier slab structure in which products are taxed at 5, 12, 18 and 28 per cent. All essential products are either exempted or taxed at 5%, while luxury or demerit items have the highest slab of 28 per cent. Some products also levy additional cess on luxury and demerit goods.

Meanwhile, the GST Council is likely to hear the demands for merger of 12 and 18 per cent slabs and exclusion of certain products from the exempted category to improve revenue.

Also, there has been a demand to reduce the proposed increase in textiles from 5 per cent to 12 per cent. Former West Bengal finance minister Amit Mitra said the hike will lead to the closure of around one lakh textile units and the loss of 15 lakh jobs. Read also: RBI calls Omicron a growth threat; Banks say are strong enough to face challenges

Several industry players and groups have also opposed the increase in tax to five per cent, saying the higher compliance cost would make the poor man’s clothes expensive. Read also: Apple engineers getting amazing bonuses of up to $180,000, here’s why

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