GST Council Meet in June Likely to Discuss on Multi-Year Plan to Reform GST Structure

GST Council Meet in June Likely to Discuss on Multi-Year Plan to Reform GST Structure

GST Council Meet in June Likely to Discuss on Multi-Year Plan to Reform GST Structure

The Goods and Services Tax (GST) Council will likely meet in the second half of June, amid a new debate on the way taxation powers are shared between the Centre and states.

As per the recent Supreme Court (SC) ruling, the recommendations of the council are not binding on the Union Government and the States, but at the same time, it has a weighted value as the country forms a collective federal structure.

The Council will plan as to how after the closure of the revenue compensation period of five years the revenue concerns of a few states could be conveyed.

Considering the perspective of the proposed comprehensive rate rationalisation to raise prices of several products, it may not be taken up in the next Council’s meeting, as per the Sources.

Even the States are not open to the suggestion of the rate hikes at this point. Besides, a report by a group of ministers, guided by Karnataka Chief Minister Basavaraj Bommai, for the purpose is further to be submitted.

Under the mechanism of the GST compensation, State Governments, for the first five years after the initial introduction of GST, are assured annual revenue growth @14%.

To secure the compliance and the scrutiny of the GST returns to elevate revenues, GST Council is to be expected to contemplate enforcing a ministerial panel’s recommendations on data analytics.

As per a senior official, “Through scrutiny of the returns there lies a huge potential in elevating revenues”.

To see the uniformity within the returns filed w.r.t. Inward and outward supplies, ITC, and the tax payment, the current scrutiny by the CBIC is about 35,000 GSTINs for 2017-18 during the first year of GST rollout.

Further, the next batch of the GSTINs for scrutiny will be selected through data analytics in two months for 2018-19, as per the official.

The matching of the Income Tax Payments by the GSTINs under scrutiny will also be done at the back-end.

Wherever the non-compliance is traced, it will be taken up by the CBIC with the taxpayer.

In April, 2022, 10.6 million GST Returns (GSTR – 3B) were filed, next to the 9.2 million returns filed in April 2021, thereby resulting in an increase in compliance.

The filing percentage for GSTR-1 is as follows: 

a. April, 2022     83.11%
b. April, 2021 73.90%

 

For the moment, the Group of Ministers led by the Meghalaya Chief Minister Conrad Sangma recommended raising the GST from to 28% (Currently 18%) on online gaming.

Also, it is likely the council will consider levying GST on 

a.    entities providing a mining platform for cryptocurrency assets; &
b.    those who are using virtual digital assets as a medium of exchange in purchases.

Currently the same are grouped as financial services and levied GST @18%.

Source: Financial Express

 

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