GST Council meeting today: See agenda of GST meeting, what states want, other details

GST Council meeting today: The GST Council is scheduled to meet on Friday, December 31 at 11 am. The meeting will be chaired by Finance Minister Nirmala Sitharaman. The Council is set to discuss, among other things, the report of the state’s panel of ministers on rate rationalization. This will be a physical meeting, wherein reforms in duty reversal in certain goods will also be discussed. An official told PTI that the 46th GST Council meeting will be held in Delhi. The Group of Ministers (GoM) will submit its report to the Council on rationalization of rates today. The panel has reviewed items under an inverted fee structure to help reduce refund payments.

What is on the agenda of the GST Council meeting today?

The GST Council may discuss, among other things, a hike in taxes on footwear and clothing.

According to a government notification, all footwear below Rs 1000 will attract 12 per cent GST. On the other hand, all readymade textiles except cotton will also attract 12 per cent GST. Earlier these items were sold at 5% GST rate.

State governments and business bodies have been demanding a postponement of this hike, saying it will affect many small businesses. He also warned that the move would come as a curse for the poor, who would eventually not be able to buy clothes, which is one of the basic necessities of life.

Apart from this, the GST Council will also discuss the report submitted by the Group of Ministers (GoM) on rate rationalization. The panel in its report has recommended ways to help reduce refund payments.

It has also made several “comprehensive” recommendations to the GoM with regard to slab and rate changes 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 at the lowest slab, while luxuries and demerit items attract the highest slab. On top of the highest slab, a cess is levied on luxuries and demerit items.

what do states want

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.

Besides this, several states have demanded that the GST Compensation Cess regime be extended for another five years and the central government’s share in centrally sponsored schemes be increased as the COVID-19 pandemic has hit their revenues. The GST compensation to states for revenue shortfall resulting from subsuming local taxes such as VAT in a uniform national tax Goods and Services Tax (GST) will expire in June next year.

Opposition ruled states including Delhi, West Bengal, Tamil Nadu, Kerala, Chhattisgarh and Rajasthan have made this demand. “Many states have asked for it. We have also asked to increase the GST compensation. If it is not extended, the financial condition of many states will deteriorate,” Delhi Deputy Chief Minister Manish Sisodia said on Thursday after pre-budget consultations of state finance ministers with Sitharaman.

(with PTI inputs)

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