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The GST Council headed by Finance Minister Nirmala Sitharaman began deliberations today
The GST Council on Tuesday approved changes in tax rates on some goods and services while allowing states to issue an e-way bill for intra-state movement of gold and precious stones, officials said. It was the first day of the two-day meeting of the GST Council which is headed by Finance Minister Nirmala Sitharaman, and is going on in Chandigarh.
Lets have a brief look at the key pointers from Day One of meeting in 10 points.
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In the meeting on Tuesday, the GST Council accepted the interim report of the group of state finance ministers, headed by Karnataka Chief Minister Basavaraj S Bommai, on rate rationalisation, including correction of inverted duty structure and removing tax exemption on some items, to simplify the rate structure.
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The Group of Ministers (GoM) had suggested withdrawal of GST exemption on a host of services including on hotel accommodation of less than Rs 1,000 per day and replacing it with a 12 per cent tax.
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It also recommended a levy of 5 per cent GST on room rent (excluding ICU) charged for hospitalised patients where the hospital room charges are above Rs 5,000 per day.
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It wanted all post office services other than postcards and inland letters, book post and envelopes weighing less than 10 gm, to be taxed. Also, cheques, loose or in book form should be taxed at 18 per cent, the GoM recommended.
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The GoM favoured withdrawal of exemption given to renting of residential dwellings by businesses for residential use.
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With regard to e-way bill on intra-state movement of gold, jewellery and precious stones to check evasion, the Council recommended that states can decide on the threshold above which the electronic bill is to be made mandatory. A panel of state ministers had recommended the threshold to be Rs 2 lakh and above.
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With regard to high-risk taxpayers, a report of a panel of state finance ministers had suggested verification after registration for high-risk taxpayers under GST, besides using verification of electricity bill details and bank accounts for identifying such taxpayers.
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Meanwhile states ruled by Opposition parties have demanded that either the revenue sharing formula under the GST regime should be changed or the compensation period should be extended by five years, amid concerns over revenue losses.
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The Goods and Services Tax (GST) was introduced on July 1, 2017, and states were assured of compensation for the revenue loss till June 2022, arising on account of the GST rollout.
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Chhattisgarh Finance Minister TS Singh Deo said the present formula for equally splitting revenues from the GST between the Centre and states should be changed, with a larger share of 70-80 per cent being given to states. Kerala Finance Minister KN Balagopal said the GST compensation mechanism for states should be extended to make good the revenue loss.
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