The GST Council is meeting today: The GST Council is scheduled to meet on December 31, Friday at 11 a.m. The meeting will be chaired by Finance Minister Nirmala Sitharaman. The council is due to discuss, among other things, the report of the group of ministers of state on the rationalization of rates. This will be a physical meeting, which will also discuss the correction of the reversal of duties on certain goods. The 46th GST Council meeting will be held in Delhi, an official told PTI. The Group of Ministers (GoM) on Rate Rationalization will report to Council today. The panel reviewed the items under a reverse duty structure to help minimize reimbursement.
What is the agenda for today’s GST Council meeting?
Among other things, the GST Council should discuss the increase in taxes on footwear and textiles.
According to a government notification, all shoes below Rs 1000 will be subject to 12% GST. On the other hand, all ready-made textiles, except those made with cotton, will also be subject to 12% GST. Previously, these items were sold at a rate of 5% GST.
State governments and merchant bodies have demanded a postponement of this hike, citing that a number of small businesses will be affected by this. They also warned that the move would be a scourge for the poor, who would end up being unable to afford clothes, which are 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 recommended in its report ways to minimize refunds.
He also made numerous “drastic” recommendations to the GoM regarding slab and rate changes and the removal of items from the exemption list. Currently, the GST is a four-level slab structure of 5, 12, 18, and 28%. Essential items are either exempt or taxed at the lowest slab, while luxury and demerit items attract the highest slab. At the top of the highest slab, a tax is levied on luxury and demerit goods.
What States Want
Former West Bengal Finance Minister Amit Mitra has urged the Union Finance Minister to quash a proposal to raise textiles from 5% to 12%, saying it would shut down around 1 lakh of textile units and 15 lakh job losses.
Telangana Industries Minister KT Rama Rao has also urged the Center to withdraw its plan to increase GST rates. Industry also opposed the 5% levy increase, citing higher compliance costs, especially for the unorganized sector and MSMEs, in addition to making the clothes of the poor expensive.
Apart from this, several states have demanded that the GST offset scheme be extended for another five years and that the Union government’s share of centrally sponsored schemes be increased, as the COVID-19 pandemic has had an impact on their income. GST compensation to states for lost revenue resulting from the subsumption of local taxes such as VAT in the national uniform goods and services tax (GST) will end in June of next year.
Opposition-ruled states including Delhi, West Bengal, Tamil Nadu, Kerala, Chhattisgarh and Rajasthan have made the request. “Many states have asked for this. We also asked to extend the GST compensation. If it is not extended, the finances of many states will be in bad shape,” Delhi Deputy Chief Minister Manish Sisodia said on Thursday after a pre-budget consultation of state finance ministers with Sitharaman.
(With PTI inputs)
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