Finance minister Nirmala Sitharaman is chairing on Friday the first meeting of the Goods and Services Tax (GST) Council this financial year. Here are key things to know about the meeting.
GST council may exempt government departments from e-invoicing
The GST council is expected to meet on Friday and is likely to exempt government departments and local authorities from e-invoicing which was proposed by the government of West Bengal. The e-invoicing system which aims to plug revenue leakages and ease compliance was launched in October 2020 and was mandatory for entities with a turnover of Rs 500 crore and above. It was later extended to businesses with a turnover of Rs 100 crore or more from January 1 and later to Rs 50 crore and above from April 1 this year. Read here.
GST shortfall clear as centre, states stare at Rs 2-trillion GST cess gap
The government is anticipating goods and services tax (GST) collection to fall below Rs 1 trillion in June for the first time in nine months due to Covid and compensation to states is set to exceed cess collection for the second year in a row.The GST compensation of states for FY 22 is expected to be round Rs 2.5-3 trillion against the cess collection of Rs 1 trillion estimated in the Budget.The estimation is higher than Rs 2.35 trillion compensation which was required last year by the Centre for FY21. Read here.
Footwear and readymade garment to attract higher GST
Footwear and readymade garment may attract higher goods and services tax (GST) with the GST Council expected to take up correcting the inverted duty structure in the meeting, Business Standard reported earlier. The fitment committee, which recommends rate changes to the Council, has proposed increasing the rate on footwear which is less than Rs 1,000, readymade garments, and fabrics to 12 per cent from 5 per cent now.
The panel has proposed reducing the rate for inputs like manmade fibre and yarn to 12 per cent from 18 per cent. Read here.
GST panel reject demand for tax waiver on Covid-19 vax, ventilator
The GST fitment panel has recommended a short-term rate cut on four Covid-19 related items which are oxygen concentrators, medical grade oxygen, pulse oximeters and testing kits to the lowest GST slab of 5 per cent. The panel has rejected rate reduction on Covid-19 medicines, vaccines, ventilators, temperature equipment, others on feasibility ground.The proposal will be placed before the GST council in the meeting on Friday. Read here.
Private fin-tech firms to enter e-invoicing zone
The Goods and Services Tax (GST) Council on Friday will discuss bringing in private financial technology companies to set up four more invoice generation portals (IRPs) due to unsatisfactory progress in e-invoicing. It will be in addition to the government’s National Informatics Centre (NIC).According to government data, only about half the eligible GST identification numbers (GSTINs) are generating these invoices. Read here.
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