37th GST Council Meeting is likely to be held on 20 September 2019 at Goa. The meeting will be chaired by Smt. Nirmala Sitharaman, Hon’ble Union Finance Minister. In this meeting, the council is likely to discuss the tax treatment in healthcare services and also review the revenue positions.
Healthcare sector representations are likely to be taken up by the Council, especially regarding input tax credit (ITC). Many hospitals have represented that they have suffered a hit in their annual profit margins by around 8% due to lack of ITC benefit and are now pushing for a 5% output GST without ITC.
All health care services are exempted except for the hair transplant, cosmetic surgeries and implants. At present, the input tax credit is not allowed on them, leading to an increase in the cost of inward supplies.
The council is also likely to look into the current revenue position. It intends to take further steps to curb tax evasions and increase revenue collections. As per the press release by Ministry of Finance, the GST revenue collections in the July month were around Rs 1.02 lakh crore marginally higher than the June month collection of Rs 0.99 lakh crore.
Also Read: 36th GST Council Meet Date Announced, to be Held on 25 July 2019
It is to be noted that July month collections are higher than the average monthly collection in the previous year. But the overall collections made so far has not been able to meet the annual targets.
As per the Union Budget 2019-20, the government reduced revenue collection targets to Rs 6.63 lakh crore against the original target of Rs 7.61 lakh crore which was announced in the Interim Budget 2019-20.
Apart from the above, the automobile sector demands GST rate cut but as per the officials, the auto sector concerns are unlikely to be discussed in this council meeting. The auto sector is demanding rate cut from 28% to 18% which leads to significant revenue loss for the government. Discussions and initiatives may take place during this council meeting on rate cut but a conclusive decision may not be expected soon.
The stakeholders in the auto industry are unanimously asking for a rate cut to 18% from the present rate of 28% as the high GST rate is a deterrent for boosting auto sector sales. As per a report released by the Federation of Automobile Dealers Association (FADA), there have been instances of downsizing reported of around 2 lakh jobs in automobile dealer businesses across India in the last three months. The aim was to cut down costs and survive the continuous reduction in sales.
In the last GST Council meeting, the government decided to reduce GST rates on electronic vehicles from 12% to 5%. Further, the meet had also indicated that the next council meetings will focus on BS-VI vehicle industry.
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.