Advertisement
Monday, Oct 25, 2021
Outlook.com
Outlook.com

On-Ground GST Council Meet After 20 months. Here's What You Should Look Out For

The 45th Goods and Services Tax (GST) Council meeting is set to convene physically after a long time in Lucknow on September 17

On-Ground GST Council Meet After 20 months. Here's What You Should Look Out For
Picture Courtesy: gstcouncil.gov.in
On-Ground GST Council Meet After 20 months. Here's What You Should Look Out For
outlookindia.com
2021-09-16T18:55:11+05:30

The GST Council would have an on-ground meeting for the first time in 20 months. The last such meeting was held on December 18, 2019, before the lockdowns were enforced due to Covid-19.

 

With fuel prices soaring, all eyes are set on whether the government brings diesal, petroleum, and petroleum products under the ambit of the indirect tax. However, bringing fuel under one-tax would require both the central and state governments to make huge adjustments on taxing these products. The Centre and opposition-ruled states were involved in a bitter face-off through the whole of last year over compensation to states due to loss of revenue from subsuming of taxes.

 

GST is viewed as the only solution to near-record high petrol and diesel prices in the country. GST would end the cascading effect of tax on tax (state VAT being levied not just on the cost of production but also on the excise duty charged by the Centre on such output).

 

In June, the Kerala High Court, based on a writ petition, had asked the Council to decide on bringing petrol and diesel within the GST ambit.

 

While a decision to bring fuel products under GST immediately, seems unlikely, but it's widely expected that the Council would begin a discussion on the same in tomorrow's meeting. Bringing it under one tax would provide uniformity, but it would result in loss of revenue for states and cesses for the Centre.

 

When GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities – crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) – were kept out of its purview given the revenue dependence of the central and state governments on this sector.

 

This meant that the central government continued to levy excise duty on them while state governments charged value-added tax (VAT). These taxes, with excise duty, in particular, have been raised periodically.

 

Taxes levied on petroleum products makes up a substantial part revenues of both the Centre and states. States collected Rs 2.17 lakh crore in FY21 from taxes and levies on petroleum products, while Centre had collected Rs 4.18 lakh crore.

 

"It is essential to overcome the challenges arising from the inverted duty structure on certain products, in addition to extending relief for pharma products required for treatment of Covid patients," M.S Mani, senior director, Deloitte India, said.

 

The Council is also expected to include food delivery companies like Zomato and Swiggy as restaurant services. This would shift the compliance burden on such companies instead of restaurants, thereby stopping tax evasion.

 

Extension of duty relief on Covid essentials is also likely to be on the cards. The Council would also consider the modalities of continuation of compensation cess beyond June 2022.

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

The Third Colour: Shah Rukh Khan Is A Symbol Worth Rooting For

The Third Colour: Shah Rukh Khan Is A Symbol Worth Rooting For

When we say we’re standing in solidarity with someone, we’re really standing up for our own ideals, values, peace and truth, writes comic-poet Varun Grover.

Aryan Khan Drug Case: Sameer Wankhede Alleges Being Targeted Over 'Dead Mother's Religion'

Aryan Khan Drug Case: Sameer Wankhede Alleges Being Targeted Over 'Dead Mother's Religion'

In his affidavit submitted to the court, Sameer Wankhede refuted the allegations levelled against him, and claimed he was under a 'lurking threat of arrest'.

Manchester United, Adani, 369 Slingshot Among 9 Bidders For New IPL Teams

Manchester United, Adani, 369 Slingshot Among 9 Bidders For New IPL Teams

The Board of Control for Cricket in India will today name the owners of two new Indian Premier League teams to play from 2022.

Explainer | Why Tripura's Karbong Tribe Is On The Verge Of Extinction

Explainer | Why Tripura's Karbong Tribe Is On The Verge Of Extinction

Hardly 250 people belonging to 60 to 70 families remain in Karbong tribe. Their population is getting reduced fast due to intertribal marriage, poverty and lack of proper education.

Advertisement