The 47th GST Council Meeting is anticipated to take place in the month of May to address multiple important issues like GST rate changes for an array of goods, compensation cess, and so on. Modifications to the GST tax slabs are also expected to be discussed. The upcoming GST Council Meeting will most likely be held at Shillong, Meghalaya, as per the sources.
GST Rate Hike
One of the main agendas of the 47th GST Council Meeting is GST rate hike. Since the last meeting which was the 46th GST Council Meeting held on 31st December 2021, there has been a lot of talk around GST rate revisions. In the meeting, The council decided to retain the status quo on the rate at which Textiles were taxed i.e. at 5%. However, the Finance Minister also stated that textiles will once again go under the rate rationalisation for review along with other items which also need to be reviewed for Inverted Duty Structure correction.
Thus, handbags, perfumes/deodorants, chocolates, chewing gums, leather gears, clothing accessories, and walnuts are among the items on which GST rates may be raised.
GST Tax Slab Changes
There are four GST slabs currently in effect, they are – 5%, 12%, 18%, and 28%. There are 480 goods in the 18% slab, which account for almost 70% of GST collections. Apart from that, there is a list of things that are exempt from the levy, such as unbranded and unpackaged food. The GST Council may also add new tax slabs of 3% and 8% and move some of the items from the 5% tax slab to these newly formed slabs.
Last year, the GST Council convened a team of state ministers, led by Karnataka Chief Minister Basavaraj Bommai, to recommend measures to increase revenue by rationalising tax rates.
GST Compensation Cess
Compensation Cess under GST is levied by GST – Compensation to States Act 2017. As per this act, the centre has to compensate the states for the loss of their revenue due to the implementation of GST since GST is a consumption-based taxation system. Since the commencement of the Goods and Service Tax Regime, this subject has always been the talk of the town!
Now, several states have urged the finance ministry to extend the five-year compensation period under the GST law before it ends in July 2022. It is up to the GST Council to take the final call on compensating the states. The finance ministry, however, has been regularly updating about the delivery of funds i.e. compensation to multiple states as promised.
So, these were some of the expectations from the upcoming GST council meeting. We will update the final highlights of the 47th GST Council Meeting here. Stay Tuned!
You can find the highlights of the past GST council meetings here –
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