The Goods and Services Tax (GST) Council to schedule a meeting soon to determine the compensation that needs to be paid to states concerning the revenue shortfall post GST implementation. Also, the meeting is to be held in order to perform a limited review of the tax structure. The GST Council meeting is expected to happen either towards the end of February or during early March.
The Council meeting will discuss suggestions received via different quarters to restructure GST, based on what is being approved by various official committees that are currently reviewing them. The Finance Minister has already warned against frequent changes in the GST rates; hence only a limited review of the GST structure could occur in the near future. The GST compensation-related issue is likely to be discussed in this meeting.
According to sources, the proposed GST Council meeting is expected to happen as per the Finance Minister (FM), Nirmala Sitharaman’s travel commitments. Currently, the FM is holding post-budget meetings with stakeholders in different cities.
An official also mentioned that the warning that was given by the Finance Minister against frequent changes in the GST rate only meant that it was not desirable for the GST Council to announce rate changes at every meeting. Nevertheless, when important issues need to be discussed, those will still need to be addressed at the Council meeting. One such problem which needs to be undertaken is to make decisions about what needs to be done to raise revenue collection.
States are expecting full compensation concerning shortfall related to GST revenue. However, the Centre is unable to allocate fresh funds in the event of a shortage in the proceeds from a cess imposed on luxury/sin commodities.
Key concerns related to central and state governments include correcting tax structure anomalies, revenue buoyancy and increasing overall compliance. It is anticipated that the GST Council will find a solution which will be crucial to the trust between the states and the Centre.
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Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.