GST council to meet in June, may skip rate rejig
The Goods and Services Tax (GST) Council will likely
meet in the second half of June, amid a new debate on
the way taxation powers are shared between the Centre
The Supreme Court recently
ruled that the council’s recommendations are not binding
on the Union government and states, but have a
persuasive value as the country has a cooperative
The council will
deliberate on how some states’ revenue concerns will be
addressed after the cessation of a five-year revenue
compensation period on June 30. According to sources,
the proposal for a comprehensive rate rationalisation
may not be taken up in the council’s next meeting, given
that it has the potential to raise prices of several
products at a time inflation is high and sticky.
Even state governments are
not amenable to the idea of rate hikes at this juncture,
given the generalised price pressures in the economy.
Moreover, a report by a group of ministers, led by
Karnataka chief minister Basavaraj Bommai, for this
purpose is yet to be submitted.
Under the GST compensation
mechanism, which is Constitutionally guaranteed, state
governments are assured 14% annual revenue growth for
the first five years after the tax’s July 2017 launch.
While a much-awaited
restructuring of the GST slabs to raise the
revenue-neutral rate (RNR), from a little over 11% now
to 15.5% could start in a small way this year in areas
not prone to inflation, the GST Council will likely
consider enforcing a ministerial panel’s recommendations
on data analytics to tighten compliance and scrutiny of
GST returns to augment revenues by plugging leakages.
“There is a huge potential
in augmenting revenues through scrutiny of returns,” a
senior official said.
The Central Board of
Indirect Taxes and Customs (CBIC) is currently
scrutinising about 35,000 GSTINs (assigned to business
entities) for 2017-18 (first year of GST rollout) to see
consistency within the returns filed by businesses with
regard to input supplies, output supplies, input tax
credits and tax payments. “The next batch of GSTINS will
be selected through data analytics in two months for
2018-19 for scrutiny,” the official said.
Wherever CBIC finds a gap
in compliance, it will take it up with taxpayers. Income
tax payments by these businesses will also be tallied at
In an indication of
increase in compliance, in April 2022, 10.6 million GST
returns in GSTR-3B (a self-declared summary GST return
filed every month) were filed, against 9.2 million
returns filed during April 2021.
The filing percentage for
GSTR-1 (a monthly or quarterly return that should be
filed by every registered GST taxpayer) in April 2022
was 83.11% as compared to 73.9% in April 2021.
Meanwhile, another GoM led by Meghalaya chief minister
Conrad Sangma has recommended raising the GST on online
gaming from 18% to 28% to bring the skill game tax rate
at par with chance games involving gambling and betting,
sources said. The council will consider the proposal in
its next meeting.
The council will also
likely consider levying GST on entities that provide a
mining platform for cryptocurrency assets and those who
use virtual digital assets as a medium of exchange in
purchases. Currently, 18% GST is levied only on service
provided by crypto exchanges and is categorised as
Source::: FINANCIAL EXPRESS,