46th GST Council meet chaired by FM Nirmala Sitharaman on December 31: Key points that will be discussed today

Finance Minister Nirmala Sitharaman will on Friday (December 31) preside over the meeting of the 46th Goods and Service Tax (GST) Council.

In Delhi during which discussion the report of the panel of state ministers on rate rationalisation, proposed GST hike in textile, among other things is expected.

The 46th meeting of the GST Council, chaired by Sitharaman and comprising state FMs, is scheduled on December 31, with a single agenda to consider Gujarat’s demand of putting the rate hike “decision on hold”, as also representations received from trade in this regard, said a PTI report.

GST, which subsumed indirect taxes like excise duty, service tax and VAT, was rolled out on July 1, 2017 and the compensation window ends on June 2022.

Key points that will be discussed today

Many states have demanded that the GST compensation cess regime be extended for another five years and the share of the Union government in the centrally-sponsored schemes be raised as the COVID-19 pandemic has impacted their revenues.

The GST compensation to states for revenue shortfall resulting from subsuming of local taxes such as VAT in the uniform national tax Goods and Services Tax (GST) will end in June next year.

There has been a loss of revenue to the states due to the GST tax system, the Centre has not made arrangements to compensate the loss of revenue of about Rs 5,000 crore to the state in the coming year, so the GST compensation grant should be continued for the next five years after June 2022, Chhattisgarh Chief Minister Bhupesh Baghel said.

Rajasthan Education Minister Subhash Garg said extension of compensation cess window till 2026-27 is a valid demand of states and the Centre should consider it. He also demanded reduction in import duty on gold and silver from 10 per cent to 4 per cent.

West Bengal also pitched for extension of GST compensation for another five years citing two years of difficult time due to COVID-19. COVID crisis was not anticipated when this was fixed, said West Bengal Urban Development & Municipal Affairs Minister Chandrima Bhattacharya.

Tamil Nadu Finance Minister P Thiaga Rajan said he has demanded extension of GST compensation cess regime for at least two years because of COVID-19. He also made a case for raising share of Government of India in the centrally-sponsored schemes.

Telangana Industries Minister KT Rama Rao too had made a case for withdrawal of its proposed plan to increase GST rates.