GST collection, GST, SGTS, CGST
The 43rd meeting of the GST Council, the first this year in the midst of second wave of Covid pandemic, begun on Friday morning through video conferencing.
The meeting is being chaired by Finance Minister Nirmala Sitharaman and is being attended by finance ministers of all states and union territories. Senior officers from the Centre and states are also present in the meeting.
The meeting coming in the backdrop of fresh and more deadly Covid wave sweeping the country, is expected to discuss and announce a few Covid relief measures particularly in relation to duty relief on essential Coronavirus supplies and other compliance matters.
It may also announce few measures to correct the inverted duty while discuss the compensation cess dues arising in 2021-22 due to a possible shortfall in cess collections.
Two other important items including lowering of GST rates for two wheelers and bringing natural gas into the indirect tax fold may also be included in the agenda for discussion.
Sources said certain states like Punjab have sought GST duty cut on essential medical supplies meant for Covid treatment. The council may accordingly discuss some of the measures like reducing GST or exempting from duty Corona virus related items like hand sanitisers, face masks, gloves, PPE Kits, temperature scanners, oximeters, certain Covid medicines and ventilators among others.
The meeting might also take a political colour as few opposition ruled states like West Bengal, Punjab have been pushing for exempting Covid vaccine from GST. The Finance Ministry has been opposing such a move that would deny the benefit input tax credit for producers.
Also, the GST compensation for FY22 is expected to dominate the discussions of the Council with states seeking higher compensation in wake of fall in tax revenue expected this year due to pandemic related disruptions and lockdowns in various parts of the country.
One estimate suggests that compensation requirement for states this year due to shortfall in GST collections could be to the tune of over Rs 2.60 lakh crore while centre could mobilise just about Rs 80,000-Rs 1 lakh crore from GST compensation cess.
This would still leave a large gap that centre will have to fill by arriving at some agreed formula with the states.