GST Council's two-day meet starts today: Details here
The Goods and Services Tax (GST) Council's two-day meeting commenced on Tuesday in Chandigarh. The Council will discuss a plethora of issues which include a mechanism for compensating states for revenue loss, tweaking certain tax rates, and easing registration norms for small online businesses. A discussion on the imposition of a 28% tax on online gaming, casinos, and horse racing is also expected.
GST Council headed by finance minister
The GST Council, headed by the Union Finance Minister Nirmala Sitharaman, comprises finance ministers from the states as well. The council makes recommendations about various aspects related to GST, for instance, what should be taxed and what shouldn't be and GST rates with bands, among other things. The GST Council's recommendations are based on a three-fourth majority of the members present and voting.
47th meeting of the GST Council
This is the 47th meeting of the GST Council and its outcome will be announced on Wednesday. Notably, the council is only a recommendation body and its suggestions are not binding on the Centre or states. The Supreme Court had last month said that the council's recommendations will have a "persuasive value." On matters related to GST, Parliament and state legislatures can legislate equally.
Centre-states tussle over compensation payout expected
There could be a tussle between the Centre and several states over the continuation of compensation payout beyond the five-year period which ends in June. When GST was introduced on July 1, 2017, states were assured of compensation for the revenue loss till June 2022. Notably, the Centre has already extended the compensation cess imposed on luxury and demerit goods until March 2026.
E-way bill report likely to be considered
A state ministers' panel had earlier submitted a report on making an e-way bill must for intra-state movement of gold/precious stones worth Rs. 2 lakh and above and e-invoicing mandatory for all tax payments. The council is expected to consider this report. Also, due to inflation, there might be a possibility that both states and the Centre might not favor any major rate hikes.
Discussion on Fitment Committee recommendations likely
There could be a discussion on rate changes of a few items recommended by the council's Fitment Committee. As per reports, the committee has recommended reducing GST rates to 5% from 12% on ostomy-related items like pouch or flange, barrier cream, sleeves, irrigator kit, micro-pore tapes, stoma adhesive paste, and belt. It also proposed a flat 5% GST on prostheses, orthopedic implants, and orthoses.
