GST Council Meet: Approval given to the recommendations of the Group of Ministers, GST exemption on many goods and services abolished
The GST Council on Tuesday approved changes in the tax rates on certain goods and services. Along with this, the states were also allowed to issue e-way bills for intra-state movement of gold and precious stones. States can fix a limit above which it will be mandatory to issue electronic bills.
Several compliance-related procedures for companies registered in GST and the report of the Group of Ministers (GoM) on prevention of tax evasion were also approved on the first day of the meeting of the GST Council, which formulates the Goods and Services Tax (GST), policy. Finance Minister Nirmala Sitharaman and the finance ministers of the states are also included in the council headed by it.
GoM’s recommendations accepted
According to the news, the GST Council has approved the recommendations of JoM headed by Karnataka Chief Minister Basavaraj Bommai. The Group of Ministers, headed by Karnataka Chief Minister Basavaraj S Bommai, had recommended rationalization of rates, including changes in the inverted duty structure (higher taxes on raw materials than on finished goods) and abolishing tax exemptions on certain items.
Apart from this, other recommendations made by the Finance Ministers of the states have also been accepted. These include levying tax at the rate of 12 per cent on hotel rooms with rents less than Rs 1,000 per day, 5 per cent GST on rooms rented above Rs 5,000 for hospitalized patients (excluding ICU) and postcards and inland letters, ‘books’. Suggestions for levying tax on post office services except ‘post’ and envelopes weighing less than 10 grams. Post-registration of high-risk taxpayers under GST is suggested for verification. It is recommended to take the help of electricity bill details and bank accounts to identify such taxpayers.
Issues that will be discussed in today’s meeting
Important issues like continuing the system of revenue compensation to the states after June 2022 and levying 28 per cent GST on casinos, online games and horse racing will be discussed on Wednesday. The opposition-ruled states are demanding an extension of the GST compensation system for five years or increasing the states’ share of the revenue from the current 50 per cent to 70-80 per cent.