Crucial GST panel meet starts today
The goods and services tax (GST) Council, which is meeting in Chandigarh on June 28 and 29, is expected to take up a series of issues for discussion, such as a mechanism for compensating states for revenue loss, tax rate tweaks in some items and relaxed registration norms for small online suppliers.
The 47th meeting of the all-powerful council would also consider suggestions on making e-way bill mandatory for intra-state movement of gold/ precious stones worth Rs 2 lakh and above and einvoicing mandatory for all taxpayers supplying gold/precious stones having annual aggregate turnover above Rs 20 crore.
The panel is also expected to decide on the widely expected measure of levying the highest tax of 28 per cent on online games, casinos and horse racing to boost revenues.
The 33-member GST Council, which comprises representatives from each of the states, Centre and three Union territories, has met nearly 50 times over the past five years and each meeting has seen tweaking of GST rules, regulations or tax slabs.
The hottest topic before the Council now is the GST compensation cess for states. "The Council may see a stormy discussion around compensation payout to states with opposition-ruled states aggressively pushing for its continuation beyond the fiveyear period which ends in June," sources said.
The Centre, last week, notified extension of the compensation cess levied on luxury and demerit goods till March 2026, to repay borrowing that were done in 2020-21 and 2021-22, to compensate states for GST revenue loss.
GST was introduced from July 1, 2017, and states were assured of compensation for the revenue loss till June 2022, arising from the GST roll out.
An interim report of a group of ministers on rate rationalisation, which is likely to suggest correcting the inverted duty structure and removing some items from exempted list, would also be taken up for consideration. Separately, the report of the committee of state and central officers, commonly referred to as the Fitment Committee which suggested tweaking rates in a handful of items and issuing clarification in case of majority of items would also be deliberated at the meeting.
Also, the committee has suggested deferring a decision on taxability of crypto currency and other virtual digital assets, pending a law on regulation of crypto currency and classification if it is goods or services.
"The Council is also likely to relax compulsory registration norms for small businesses with annual turnover up to Rs 40 lakh and Rs 20 lakh for goods and services, respectively, using e-commerce platforms to sell products," the sources said.
The sources further said that businesses with a turnover of up to Rs 1.5 crore and making e-commerce supplies would be allowed to opt for the composition scheme, which offers a lower rate of tax and simpler compliance. "Currently, businesses supplying through e-commerce cannot avail of the composition scheme. The changes would bring in parity between entities who are doing businesses through either online and offline mode under GST," the sources added.