GST Council Meeting Update: The 45th meeting of the Goods and Services Tax (GST) Council, the first in-person meeting in nearly two years, began in Lucknow on Friday. From bringing petroleum products under the purview of GST to extending the GST exemption on COVID-essential items, a number of issues are going to be discussed in the GST Council meeting on September 17. The council is also likely to deliberate on compensation. For states, rationalization of an inverted duty structure on the supply chain of certain goods.
“This time the meeting of the GST Council will be a physical one, which will be for the first time since the outbreak of the pandemic. The news about bringing petroleum products under the purview of GST has gained increased attention. Considering the fact that this is a highly contentious issue due to its serious impact on the finances of both the states and the Centre, no major decision is expected in this regard. Diwakar Vijaysarathi, Founder and Managing Partner, DVS Advisors LLP said that the modalities for extending the compensation cess beyond 2022 are expected to be finalized during the meeting.
“The other key points on which a decision will be taken are to launch a common portal for registration and payment of taxes, reverse duty on certain products and other recommendations of the GoM,” he said.
The Center is likely to discuss on Friday the details of compensation cess and revenue shortfall to states due to the Covid-19 pandemic. During the inception of GST, the Center had promised that it would compensate the state for any revenue loss in the first five years beginning July 1, 2017. In October 2020, the GST Council had agreed in-principle to carry forward the compensation. Original five years. The shortfall is calculated by assuming an annual growth of 14 per cent in GST revenue over the base year of 2015-16.