The Goods & Services Tax (GST) Council will hold its 37th meeting on September 20 in Goa, but is unlikely to consider any rate reduction.
A senior Finance Ministry official told BusinessLine: “Many sectors are clamouring for a rate reduction. They range from automobile to cement to biscuit. Now, if it is done for one sector, it can open floodgates. We should not forget the revenue situation.” The automobile sector has requested the government to lower the duty for a brief period while biscuit companies are pressing for reducing GST from 18 per cent as consumers are thinking twice before buying even a ₹5 packet.
When asked about the demand for lowering the GST on biscuits, during her press conference last week, Finance Minister Nirmala Sitharaman said if State Finance Ministers have sensed that branded companies are shutting down because of GST, she would like to hear from them. “After all, the GST Council is not just the Union government. I would want many of the GST related issues discussed as issues that affect the States too and GST related decisions are not unilaterally taken by the Central government. So, I like to hear States Ministers much before all of us together take a call on it,” she had said.
The official said ‘as of now’ there is no proposal for lowering rate on any of the item. The Finance Ministry is having a tough time on the revenue front. The average revenue collection during the current fiscal is over ₹1 lakh crore. Certainly, this is sufficient to meet the scaled down target of GST collection as projected in the Budget.
The Finance Minister scaled down the GST collection target to ₹6.63 lakh crore, from ₹7.61 lakh crore. Accordingly, combined with State GST (SGST), the average monthly collection is now estimated at nearly ₹1 lakh crore as against ₹1.14 lakh crore (based on the data of Interim Budget). However, scaling down the target does not mean that the government wants less revenue. It needs more funds to meet the rising expenditure and contain fiscal deficit.
The official said the rules prescribe the GST Council to meet at least once in three months and since the Goa government had offered to host the meeting, it was accepted. The meeting is expected to review return filings and phased introduction of new return forms. It is also likely to consider action against non-filers which include debarring them for issuance of e-way bill. So far, on an average 20 per cent assessees do not file return by due date which affects overall revenue collection.
The Council has met 36 times and no occasion has arisen so far that required voting to decide any matter. Till its 34th meeting, the GST Council has taken 1,064 decisions which include 219 decisions taken by the GST Implementation Council (GIC). As on May 14, as many as 1,006 decisions have been implemented and only 58 decisions of the GST Council (of which 39 were unique issues) are yet to be implemented. In other words, 94.5 per cent of the decisions of the GST Council have already been implemented, which is a significant achievement, given the complicated nature and wide area of subjects/issues involved and the fact that all decisions were taken unanimously.