GST Council Meet on August 27; states’ compensation, hike on sin goods cess on agenda; here’s what to expect
New Delhi | Jagran Business Desk: The Goods and Service Tax (GST) Council will hold its 41st meeting on Thursday with an agenda of discussing the revenue compensation to states and find a solution to meet the gap between GST cess collections and the total compensation paid to the states. The meeting will be held via video conferencing.
Several states have been facing financial problems because of the ongoing coronavirus crisis and have been asking the Centre to release their compensation in a timely manner. This will be the key agenda of the 41 GST Council Meet. However, the GST Council will also discuss some other points in its 41st meeting. So as GST Council holds it 41st meet, here’s what you can expect from it.
Revenue compensation to states under indirect tax regime
This will be the key issue which will be discussed by the GST Council in its 41st meeting on Thursday. The states have been asking the Finance Ministry to release their compensation timely but the coronavirus pandemic and the subsequent lockdown has hit the Centre’s financial position and GST cess collections.
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As per media reports, the GST council will discuss various proposals to raise funds in the compensation cess kitty, including an overall rate rationalisation exercise or expand the cess kitty by levying cess.
“The suggestion on hiking cess quantum on sin goods have come from several states including Delhi, Punjab, Goa, Bihar and a few other, who have argued that council can consider mobilizing funds these three sin goods, currently, do not attract the maximum cess levy allowed under the cess rules,” CNBCTV18 quoted sources as saying.
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The states had also suggested the GST Council allow them to borrow funds from the market to reduce the gap in the losses. The GST Council, however, is yet to take a decision on it. Some reports suggest that the Centre will likely ask the states to borrow to meet the GST shortfall.
Hike on cess on sin goods likely to be discussed
As per reports, the GST Council will also discuss increasing cess on sin goods like cigarettes, pan masala and aerated drinks. Currently, the maximum cess that can be levied on cigarettes is 290 per cent, 130 per cent on pan masalas and 15 per cent on aerated drinks.
Council to again meet on September 19
The GST Council will also meet on September 19 and as per reports, it will likely discuss about e-way bill on gold and overarching tech changes in GST returns.
Posted By: Aalok Sensharma