The 45th Goods and Services Tax (GST) Council meeting will be held on Friday, 17th September 2021, at Lucknow, chaired by Union Finance Minister Nirmala Sitharaman. The GST Council is meeting physically for the first time after the COVID-19 outbreak n the country. The last meeting held was the 44th GST Council meeting, conducted on 12th June 2021, which provided tax concessions on COVID-19 essentials.
The following are the expectations from the 45th GST Council meeting:
- Bringing petrol and diesel under GST: Fuel prices continue to boom, and one of the principal contributors to such high prices is the complex and high rates of the indirect tax levy, accounting for almost 50%. Bringing petrol and diesel under the GST levy can remove the cascading effect of taxes, and prices will reduce to some extent. However, few states are heavily dependent on tax revenues on fuel. Hence, there might be a long debate on this issue in tomorrow’s Council meeting.
- Extension of GST concessions on COVID-19 essentials: The health authorities expect an outbreak of the COVID-19 third wave by the end of this year. Hence, the government may extend the GST concessions on the essentials used in the treatment by a few more months. Earlier, the GST Council reduced the GST rates on COVID treating drugs until 30th September 2021.
- Reduction of GST on steel scrap: The GST authorities picked on many steel manufacturers, enforcing them. It was due to the fake invoicing carried out by the scrap dealers who supply steel scrap to these manufacturers. Therefore, several state finance ministers have proposed to reduce the GST rate on steel scrap from 18% to 5%. Hence, the Council might decide in this regard.
- COVID cess on pharmaceuticals and power: Council may also discuss the possibility of implementing a COVID cess on pharmaceuticals and the power sector in Sikkim. The Group of Ministers (GoM), being led by Karnataka Chief Minister Basavaraj Bommai, has supported Sikkim’s proposal of levying a 1% cess on intra-state supplies of pharmaceuticals for two years. Also, the GoM has recommended that the state consider charging ten paise per unit of electricity consumed or sold. Hence, the Council may consider the GoM report and decide in this regard.
- Extension of compensation cess beyond June 2022: During the 44th GST Council meeting press meet, the Union Finance Minister Nirmala Sitharaman said there would soon be a special session only to discuss compensation cess beyond July 2022. However, the ministry did not conduct special sessions after that. Hence, there must be a decision on extending compensation in this Council meeting.
- Resolving issues in inverted tax structure: The GST Council may take a final call on the inverted tax structure for several key sectors facing this issue. The possible sectors may include textile, fabrics, and footwear. Especially, the footwear industry is bearing a huge brunt of the inverted tax structure, affecting its profitability. Therefore, a correction of the inverted tax rates is the need-of-the-hour for this sector.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.