Enabling seamless refunds for exporters, rationalisation of tax rates applicable on lotteries and a probable boost for the beleaguered real estate sector are expected to be on the table for discussion during the GST Council meet today, The Economic Times reports.
Clarification on rates on long-term leases as well as a temporary cess of 2 percent on certain goods could also be on the Council’s agenda, the report adds.
GST rate hike likely today: market experts say it could spoil the party on D-Street
The Central GST collection fell short of the Budget Estimate by nearly 40 percent during the April-November period of 2019-20, according to government data.
Delhi: Finance Minister Nirmala Sitharaman chairs GST Council meeting. pic.twitter.com/jVdFlfqNbZ
— ANI (@ANI) December 18, 2019
According to the GST Act, States and Union Territories with Assemblies are guaranteed compensation if the GST revenue growth is less than 14 percent. The amount is payable bi-monthly.
Some states have said that they aren’t receiving the compensation cess from the central government, which they said was impacting their finances. Last month, West Bengal Finance Minister Amit Mitra pointed out that the dues owed to the states and three Union Territories with Legislative Assemblies stood at Rs 40,000 crore.
The Council is expected to deliberate on an alternative mechanism for compensation cess and look at ways to boost revenue from indirect taxes. There is a view that compensation cess may no longer be enough to adequately compensate states and there is a need to come up with some other mechanisms.
Earlier this month, the government had written to state GST officers, inviting suggestions from state governments on ways to increase GST revenues.
Amid a looming revenue shortfall, suggestions for a hike in GST rates and cess to meet the gap have been put forward by stakeholders.
Discussions on ways to shore up government revenues are expected following lower-than-expected collections which have led to a delay in compensation payment to States.
The GST Council headed by Finance Minister Nirmala Sitharaman is scheduled to meet on December 18 to review the taxation structure.