New Delhi: GST Council Several issues will be discussed in its two-day meeting starting Tuesday, including a mechanism to compensate states for revenue loss, change in tax rate on certain items and easing of registration norms for small online suppliers.
Further, the council, chaired by the Union Finance Minister and comprising state counterparts, will discuss a GoM’s report on high-risk taxpayers, besides imposing the highest tax of 28 per cent on online games, casinos and horse racing. GST To prevent theft.
The GST Council will also consider a report of the state’s panel of ministers on making e-way bills mandatory for intra-state movement of gold/precious stones valued at Rs 2 lakh and above and for supply of gold/precious stones. E-invoicing will be considered mandatory for all taxpayers. and has an annual total turnover of more than Rs.20 crores.
In addition, an interim report of a Group of Ministers on rate rationalization will also be considered, which may suggest reforms in the inverted duty structure and removal of certain items from the exempted list.
Separately, the report of the Committee of State and Central Officials, commonly known as the Fitment Committee, which suggested revision of rates in some items and issue of clarifications in the case of most items, was also held in Chandigarh. Will be discussed in the upcoming meeting. 28-29 June.
The Committee of Officials has also suggested deferring the decision on the taxability of cryptocurrencies and other virtual digital assets, pending a law on the regulation of cryptocurrencies and it’s classification on goods or services.
The council could see a stormy discussion about compensation payments to states with opposition-ruled states aggressively pushing for its continuation beyond the five-year period ending in June.
The Center, last week, notified the extension of the compensation cess levied on luxury and demerit items till March 2026 to repay borrowings made in 2020-21 and 2021-22 to compensate states for GST revenue loss.
GST was introduced with effect from July 1, 2017, and states were assured compensation by June 2022 for revenue loss due to GST roll out.
Though the protected revenue of the states has been growing at a compounded growth of 14 per cent, the cess collection did not grow in the same proportion, with COVID-19 further widening the gap between the protected revenue and actual revenue receipt, including a reduction in cess collection.
To meet the resource gap of states due to low release of compensation, the Center borrowed Rs 1.1 lakh crore in 2020-21 and back-to-back loans to meet a portion of Rs 1.59 lakh crore in 2021-22 issued as. Regarding shortfall in cess collection.
The council may relax the mandatory registration norms for small businesses with an annual turnover of up to Rs 40 lakh and Rs 20 lakh, respectively, for goods and services using e-commerce platforms to sell products.
At present, suppliers making supplies through e-commerce are required to take mandatory Goods and Services Tax (GST) registration.
Also, businesses with a turnover of up to Rs 1.5 crore and making e-commerce supplies will be allowed to opt for the composition scheme, which offers lower tax rates and simpler compliance.
Presently, businesses supplying through e-commerce cannot avail the composition scheme.
The changes will bring parity between entities that are doing business under GST through online and offline modes.
A report by a panel of state finance ministers has suggested post-registration verification of high-risk taxpayers under GST, besides using electricity bill details and bank accounts verification to identify such taxpayers.
Further, the council, chaired by the Union Finance Minister and comprising state counterparts, will discuss a GoM’s report on high-risk taxpayers, besides imposing the highest tax of 28 per cent on online games, casinos and horse racing. GST To prevent theft.
The GST Council will also consider a report of the state’s panel of ministers on making e-way bills mandatory for intra-state movement of gold/precious stones valued at Rs 2 lakh and above and for supply of gold/precious stones. E-invoicing will be considered mandatory for all taxpayers. and has an annual total turnover of more than Rs.20 crores.
In addition, an interim report of a Group of Ministers on rate rationalization will also be considered, which may suggest reforms in the inverted duty structure and removal of certain items from the exempted list.
Separately, the report of the Committee of State and Central Officials, commonly known as the Fitment Committee, which suggested revision of rates in some items and issue of clarifications in the case of most items, was also held in Chandigarh. Will be discussed in the upcoming meeting. 28-29 June.
The Committee of Officials has also suggested deferring the decision on the taxability of cryptocurrencies and other virtual digital assets, pending a law on the regulation of cryptocurrencies and it’s classification on goods or services.
The council could see a stormy discussion about compensation payments to states with opposition-ruled states aggressively pushing for its continuation beyond the five-year period ending in June.
The Center, last week, notified the extension of the compensation cess levied on luxury and demerit items till March 2026 to repay borrowings made in 2020-21 and 2021-22 to compensate states for GST revenue loss.
GST was introduced with effect from July 1, 2017, and states were assured compensation by June 2022 for revenue loss due to GST roll out.
Though the protected revenue of the states has been growing at a compounded growth of 14 per cent, the cess collection did not grow in the same proportion, with COVID-19 further widening the gap between the protected revenue and actual revenue receipt, including a reduction in cess collection.
To meet the resource gap of states due to low release of compensation, the Center borrowed Rs 1.1 lakh crore in 2020-21 and back-to-back loans to meet a portion of Rs 1.59 lakh crore in 2021-22 issued as. Regarding shortfall in cess collection.
The council may relax the mandatory registration norms for small businesses with an annual turnover of up to Rs 40 lakh and Rs 20 lakh, respectively, for goods and services using e-commerce platforms to sell products.
At present, suppliers making supplies through e-commerce are required to take mandatory Goods and Services Tax (GST) registration.
Also, businesses with a turnover of up to Rs 1.5 crore and making e-commerce supplies will be allowed to opt for the composition scheme, which offers lower tax rates and simpler compliance.
Presently, businesses supplying through e-commerce cannot avail the composition scheme.
The changes will bring parity between entities that are doing business under GST through online and offline modes.
A report by a panel of state finance ministers has suggested post-registration verification of high-risk taxpayers under GST, besides using electricity bill details and bank accounts verification to identify such taxpayers.