GST Council Meet Today: The meeting of the GST Council is going to be held on Friday. In this meeting to be chaired by Finance Minister Nirmala Sitharaman, many things are to be discussed including the report of the panel of state ministers on rationalization of rates. This will be a one-on-one meeting and will also discuss reforms in the inverted duty structure on certain products.
An official said that the 46th meeting of the GST Council will be held in Delhi on December 31. This will be an extension of the pre-budget meeting with state finance ministers on December 30. During the meeting, a group of state finance ministers will submit their report for rationalization to the GST Council. The group has reviewed items under the inverted duty structure to help reduce refund payments.
What will be the agenda of the meeting today
Among other things, the GST Council meeting is expected to discuss the increase in tax on footwear and textiles.
According to a government notification, all footwear valued below Rs 1,000 will attract 12 per cent GST. On the other hand, all readymade textiles, except those made of cotton, will also attract 12 per cent GST. Earlier these items were sold with 5% GST rate.
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GoM’s report will be considered
State governments and traders’ bodies sought to defer the hike, saying it would affect a large number of small traders. He warned that the move would be hardest hit by the poor, who would eventually be unable to afford clothing. Clothes are one of the basic necessities of life.
In addition, the GST Council will also consider the report submitted by the Group of Ministers (GoM) on rationalization of rates.
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Change in slab is also recommended
Apart from this, the fitment committee comprising tax officials of the states and the center has made several major recommendations regarding changes in GST slabs and rates. Some items kept out of the purview of GST have also been recommended to be brought in the GST list.
At present, there are four slabs of GST, under which 5, 12, 18 and 28 percent tax is levied respectively. Luxury and perishable goods have been kept in the top slab of 28%. Apart from this, additional cess is also imposed on them.
What do states want
Former West Bengal Finance Minister Amit Mitra has urged the Finance Minister to withdraw the decision to increase the rate on textiles from 5 per cent to 12 per cent, saying that it will shut down one lakh textile units and make 15 lakh people unemployed.
Telangana Industries Minister KT Rama Rao also requested for withdrawal of the proposed hike in GST rates. He said that this will hit the unorganized sector and MSMEs, as well as buying clothes for the poor will become expensive.
These demands have been made by opposition-ruled states including Delhi, West Bengal, Tamil Nadu, Kerala, Chhattisgarh and Rajasthan. Delhi Deputy Chief Minister Manish Sisodia after a pre-budget consultation with Sitharaman on Thursday said, “We asked for an increase in GST compensation. If this is not done, the finances of many states will deteriorate.”
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