GST Council meeting on December 31, rationalization of rates on the agenda

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Finance Minister Nirmala Sitharaman reached the BJP Parliamentary Party meeting.

Highlight

  • GST Council to meet on December 31 to discuss rationalization of rates
  • This will be the 46th meeting of the GST Council
  • The meeting will be extended till the pre-budget meeting with the finance ministers of the states on December 30.

The GST Council, headed by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, the report of the state’s panel of ministers on rate rationalisation.

This will be a physical meeting, wherein reforms in duty reversal in certain goods will also be discussed.

The 46th GST Council meeting will be held in Delhi on December 31, an official said, adding that it will be an extension of the pre-budget meeting with state finance ministers on December 30.

The Group of Ministers (GoM) on rate rationalization will submit a report to the Council. The panel has reviewed items under an inverted fee structure to help reduce refund payments.

In addition, the fitment committee, comprising tax officials from states and the Center, has made several “comprehensive” recommendations to the GoM regarding changes in slabs and rates and removal of items from the exemption list.

Presently, there is a four tier slab structure of GST 5, 12, 18 and 28 per cent. Essential goods are either exempted or taxed in the lowest slab, while luxury and demerit items are subject to the highest slab.

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On top of the highest slab, cess is levied on luxury and demerit items.

There has also been a demand for merger of 12 and 18 per cent slabs as well as exclusion of certain items from the exemption category to balance the impact of slab rationalization on revenue.

Former West Bengal Finance Minister Amit Mitra has urged the Union Finance Minister to roll back the proposed hike in textiles from 5 per cent to 12 per cent, saying it will close around one lakh textile units and lead to the loss of 15 lakh jobs.

Telangana Industries Minister KT Rama Rao has also urged the Center to withdraw its proposed plan to hike GST rates.

The industry has opposed the hike in tax by five per cent, citing higher compliance cost, especially for the unorganized sector and MSMEs, besides making clothing for the poor expensive.

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