The Goods and Services Tax (GST) Council will meet on Saturday, which it is likely to rationalise the 28% slab by cutting tax rates on items like cement, PTI reported. There are 30 items left in the highest slab of 28% including large screen colour television, motor vehicles, yachts etc.
On Tuesday, Prime Minister Narendra Modi said that the government will tax most items below 18% to further simplify the indirect tax regime. “Today, we are approaching a stage where 99 per cent items can be brought under 18 per cent,” the prime minister said in his speech at the event in Mumbai.
Besides rate cut, some other important decisions are also expected. The GST Council, headed by Finance Minister Arun Jaitley and comprised of his state counterparts, may also deliberate upon several other issues such as an increase in the turnover threshold for quarterly filing and simplification of tax refund process.
“The council’s view regarding the load on GSTN system around return filing dates is based on current practice; however, the on rollout of simplified returns, with the expectation that taxpayers upload invoices on regular basis (daily/weekly etc), the load on GSTN is expected to be spread out,” Amit Parmar, Senior Vice President, Vayana Network, GST Platform said.
The GST Council meeting is being held against the backdrop of lower than budgeted collection so far. The council may also discuss ways to increase collection and stop tax evasion. The biggest problem, in the present scenario, could be to announce rate cut given the collection shortfall.
The government has always said that more items would be brought down to 18% or less rate but only if there was enough revenue buoyancy.
In the first eight months (April-November) of the current fiscal, the government has mopped up over Rs 7.76 lakh crore from GST. The 2018-19 budget had estimated annual GST collection at Rs 13.48 lakh crore, which means a monthly target of Rs 1.12 lakh crore.