GST Council Meeting Later Today, Tax Rates Can Be Increased and Other Things on Expected

GST Council Meeting Today

Boosting the slumping real estate sector, justifying the tax rates on lotteries, and making refunds process smooth for the exporters are some of the major topics that will be on the agenda in 38th GST Council meeting according to sources.

The centre is trying to resolve the deficit between GST (Goods and Services Tax) revenues between the states and the Centre, additionally the GST Council will be trying to come up with resolutions to the problems being faced by business in various industries.

The government could as well bring certain goods under a temporary cess of 2%, especially those products that are currently placed in the 5% and 18% brackets to boost the revenue shortfalls.

Also Read: Protest Against CAA Turns Violent in Seelampur, Pelting on Police

It is also expected that the GST Council in today’s meeting may mend the rates on the long-term leases. The government was planning to exempt those long term leases that are of 30 years or more if the states provides for it, or if the Central Government has a minimum stake of 20% in it. If this is approved in the 38th GST Council Meeting, it will considerably benefit the realty, manufacturing, and hospitality companies.

38th Gst Council Meeting Latest Updates

In the past, many companies had taken the government to court as there is an 18% GST on long-term lease transactions. According to the GST Agenda, as seen by a leading news agency of India, 5% GST will be imposed on the long-term leases if the plot (area) is owned by a private individual.

According to industry pundits, if the GST Council in the meeting exempt the long-term land leases which are made for setting up manufacturing units will help in encouraging people in invest more, thus boosting the economy.

38th GST Council Meeting
Image Source: Reddit

The government also wants to rationalize the GST rates for lotteries in the 38th GST Council meeting as currently, lotteries have two different rates. The lotteries that are run by the state government are levied 12% GST whereas the lotteries that are authorised by them but are sold outside the state are placed under 28% GST slab.

According to the agenda, lotteries are demerit/sin goods, and hence, should be placed in the higher bracket of GST, citing, either at 18% or at 28%.

Partner in Deloitte India, M S Mani said “In addition to the divergent rates on state lotteries and state-authorised lotteries which need to be harmonised, it is also necessary to determine the appropriate valuation mechanism to tax lotteries”. He added that “this issue acquires urgency, considering the fact that the written petition filed in the Supreme Court, which was adjourned earlier to enable submissions, is slated to come up in early January 2020”.

The 38th GST Council Meeting will also work around for exporters, currently an exporter have to approach two distinct authorities for refunds and disbursals which creates a pressure on them with limiting their cash flow also the long process is often time consuming, now the government is likely to create a single-window clearance for the exporters where they can avail refunds and disbursal, making the process seamless.

Suresh Nandlal Rohira, Partner, (Leader GST & Customs) Grant Thornton India LLP said “there were issues that were raised by the industry around delays in refunds and there was no way the Centre could monitor the allocation of refunds or whether they are being generated as per the requirement”. He said once the Centre creates a unified window “the Centre will now be able to monitor refunds for exporters and can even sanction ones that are being held back by the state authorities due to various reasons”.

The government is likely to impose further surcharges on the existing GST slabs to generate more revenue from tax collection and thus divide the collections between the state and Centre via SGTS and CGST. However, this agenda was not mentioned in the document. An official advised two state government “There have been a lot of discussions with several state authorities and this could be a way to address the revenue collection shortfall and the government could levy 2% cess so the 5% GST will become 7%, while 18% would become 20%, for some time”.

Avatar

admin

Read Previous

Protest Against CAA Turns Violent in Seelampur, Pelting on Police

Read Next

Supreme Court Dismisses Review, Orders Death for Nirbhaya Case Convicts

Leave a Reply

Your email address will not be published. Required fields are marked *