Agenda of 30th GST council meeting held on 28th September 2018 revolved around the administerial progress made in GST system. Nonetheless, discussions also happened around the necessity to levy cess in case of exigencies. Finance Minister of India, Arun Jaitley chaired the meeting held via video conferencing.
A seven-member Group of Ministers (GoM) is formed to look into the following verticals and submit a report of recommendations to the GST council by 31st October 2018 on the following issues:
a. Imposition of cess under GST to provide relief to Kerala flood victims – Kerala Government pitched to the GST Council to charge a 10% cess to recover the loss due to floods. The GoM is to take a call on whether or not the proposed cess must come into effect and who must bear the same.
b. A temporary tax under GST to help states in exigencies: GoM is to look into the long-term implications of levying state cess. This cess will be levied on the commodities for a temporary period, subject to notification. However, an additional 1% tax on selected items was discussed in the meeting.
c. Other Issues to be looked by GoM: The committee will look into the issues such as whether the temporary tax should be levied only in the state concerned or should it be an all-India imposition. Also, a class of goods subject to this tax must be proposed and decided.
It will also to look into whether the National Disaster Response Fund (NDRF)/State Disaster Response Fund (SDRF) mechanism is enough to deal with the calamities and the situations where calamity tax can be legally imposed under GST.
The GST collections have been beyond the expected target in many north-eastern states. Additionally, a panel of analysts will be conducting a research on all the states pertaining to the GST collection and will recommend ways to bridge the gap between the current revenue and targeted revenue.
The graph of the GST revenue collection showed that states showed 16% shortfall in the first year of its implementation. This shortfall has been reduced to 13% in April – Aug 2018. Finance minister Arun Jaitley stated that the deficit is expected to neutralize itself within 5 years of GST’s rollout.
As per the analysis based on the facts mentioned above, the future rate cuts in the goods and services will depend on the increase in revenue collections in all the states in the coming months.
* Press releases are yet to be notified by the CBIC.
1. Rationalisation of GST rates on cruise tourism
It is expected that the council will discuss on the rationalizing GST rates on cruise tourism or exempting them completely. Currently, 18% is the rate on the supply of cruising services in cruise tourism industry.
2. Simplification and Automation of GSTR-9C
Though the reconciliation statement which is to be filed with the Annual return GSTR -9 has been notified, we can expect the council to discuss on its simplification and further automation of form. This will reduce the cost and time resources for the taxpayers.
3. Compliances for MSMEs
In the 29th GST council meeting, a committee was formed by the council to look after the compliances of MSMEs and prepare a report on it further. It is expected that the council will be discussing the matters reported by the committee for MSMEs.
4. Flood-relief cess for the State of Kerala
Council is expected to take up the discussion on the Kerala government’s demand for levying a cess to collect resources to meet the cost of recovery from the floods occurred few days back.
Though it would not be fair to the affected people to pay more taxes, let us see what the GST council decides upon.
5. GST on ATF(Aviation turbine fuel)
Finance Minister has pitched in to bring ATF under GST ambit. Rising jet fuel prices and lowering air ticket prices have pushed airlines on the brink of crisis. The move to bring ATF under GST will mostly affect those states that have more airports.