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The GST Council, chaired by Finance Minister Piyush Goyal in its next meeting on Saturday is expected to discuss key issues such as cutting GST rate on items with limited revenue impact, rationalisation of rates, inclusion of natural gas and aviation turbine fuel (ATF) under the ambit of GST, among others.
According to a senior government official, the consensus between states and the Centre pertaining to the inclusion of the two petroleum products under Goods and Services Tax (GST) may not happen immediately as states have apprehension regarding a potential loss in revenue.
“Some states such as Gujarat, Andhra Pradesh, among others, are against the idea of including natural gas under GST. However, it could be discussed in the Council meeting,” the official said.
Regarding the clamour for rate cut, the official said that revenue continues to be a concern for the government and items with massive revenue impact such as cement and paint may not be brought to a lower tax slab immediately.
The average revenue collection in the first quarter (April-June) of the financial year is not even Rs 97,542 crore.
The Council may agree to cut rates of some items such as handicrafts, sanitary napkins, handlooms, the official said adding that the government may not have to take a major hit on revenue if these products are moved to a lower tax slab.
The 28th GST Council meeting is crucial as Goyal will be chairing it for the first time since he got the temporary charge of the finance and corporate affairs portfolio in May. Former finance minister Arun Jaitley is currently working in a restricted environment from home as he underwent renal transplant two months ago.
Till now, Jaitley, had chaired all the 27 meetings of the Council that ironed out crucial taxation-related issues, along with the Centre. He played a crucial role towards the implementation of GST could be a part of the meeting via video conference.
The Council is also expected to approve 46 categories of amendments in GST-related laws, with a broader idea to reduce compliance burden, simplify the indirect tax system and bring more entities under the tax net.
Amendments such as the omission of liability to pay tax on the reverse charge, enabling new return filing procedures, allowing more service providers to opt for composition scheme, among others has been suggested.
The Council may also discuss rationalisation of rates, which could mean drawing a strategy towards fewer tax slabs under GST. Currently, GST has four broad tax slabs- 5, 12, 18 and 28 percent– and three percent tax on gold and other precious stones.
However, a two or three tier tax slab is possible only when revenue collection is stable, the official said.
Source: Moneycontrol
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