GST Council meet: States' compensation, tax tweaks on cards | 5 points
The GST Council is likely to makes changes in goods and services tax rates on a handful of items during the two-day meeting in Chandigarh starting Tuesday. But the Gujarat assembly election, scheduled for later this year, and high inflation may force the recommendatory body to defer a plan to raise GST on items of mass consumption, according to people familiar with the matter.
The GST Council, headed by Union finance minister Nirmala Sitharaman and comprising representatives of all states and UTs, is meeting after a gap of six months.
GST was introduced in India with effect from July, 2017 and states were assured of compensation for the loss of revenue arising from the roll out of new tax regime for a period of five years, which is ending this month. Sitharaman had reiterated at the 45th GST Council meeting last year that the regime paying compensation to state will end in June 2022.
The GST Council is expected to see stormy discussion around the compensation payout to states as Opposition-ruled states have been pushing for its continuation beyond the five-year period.
What is expected at the GST Council meeting? 5 Points
- The Council is slated to discuss mechanism for compensating states for revenue loss, tax rate tweaks in some items and relaxed registration norms for small online suppliers.
- It will also clear levying the highest tax of 28 per cent on online games, casinos and horse racing.
- The 47th Council meeting may also consider elaborate, item-wise tax rate rationalisation proposals to correct inverted duty structure and remove imprudent tax exemptions.
- The Fitment Committee has proposed a uniform 5% GST rate on prostheses (artificial limbs) and orthopaedic implants (trauma, spine, and arthoplasty implants). Orthoses (splints, braces, belts and calipers) too have been proposed in the lowest bracket of 5%.
- The Council is likely to issue a clarification on GST rates on electric vehicles, stating that EVs, whether fitted with battery or not, would attract 5% tax rate.