New Delhi: Many important decisions were taken today in the 47th meeting of the GST Council chaired by Union Finance Minister Nirmala Sitharaman and the state finance ministers. 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.
On the first day of the meeting of the GST Council, the policy-making body on Goods and Services Tax (GST), several compliance-related procedures for companies registered in GST, and the report of the Group of Ministers (GoM) on the prevention of tax evasion were also approved. The finance ministers of the states are also included in the council headed by Finance Minister Nirmala Sitharaman.
Demands of states
Important issues like continuing the system of revenue compensation to the states after June 2022 and levying 28 percent 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 percent to 70-80 percent.
In the meeting held on Tuesday, the council accepted the interim report submitted by the group of finance ministers of the states. The Group of Ministers, headed by Karnataka Chief Minister Basavaraj S Bommai, has made recommendations on the rationalization of rates, including an inverted duty structure (higher taxes on raw materials than on finished goods) and abolishing tax exemptions on certain items.
Low Rent Hotel Room Tax Recommendation
GoM has suggested abolishing the GST exemption on many services. This includes a suggestion to levy tax at the rate of 12 per cent on hotel rooms with rents less than Rs 1,000 per day. No tax is levied on it as of now.
Along with this, 5 percent GST has also been recommended for hospitalized patients in rooms rented above Rs 5,000 (excluding ICU). The GoM has suggested levying tax on postal services except for postcards and inland letters, ‘book posts’, and envelopes weighing less than 10 grams.
E-way bill
In the context of e-way bills for intra-state movement of gold, jewelry, and precious stones, the Council has recommended that states may fix a limit above which it would be mandatory to issue electronic bills. The Group of Ministers has recommended keeping the limit at Rs 2 lakh or above.
In the context of high-risk taxpayers, the GoM report has suggested post-registration verification of high-risk taxpayers under GST. In order to identify such taxpayers, it has also been talked about verification of electricity bill details and bank accounts.
