Pandemic disruptions may delay GST rates revision in 2022 too

Government sources privy to the development said that there would not be any increase in GST rates or movement towards converging GST to a three rate structure even during the major part of the next financial year. Only small steps may be taken by the GST Council to correct the inverted duty structure till the time the economic health of the country improves, they said.

GST Council, in its meeting in August last year, just focused on the mechanism of compensation to states for revenue forgone due to the switchover to GST. Sources said even at that meeting, it was a unified view that any review of GST rates should not be considered at this juncture. The same view also got strengthened in the parleys between the Centre and the states while deciding the compensation mechanism.

With the Centre now indicating that there would be a GST compensation shortfall even in FY22, this matter would hold prime concern of the GST Council when it meets next sometime next month or later. This would push back any talks on revising the GST rates.

But sources indicated that the Council may in phases take steps to correct the inverted duty structure, especially in sectors such as fertilisers, steel utensils, solar modules, tractors, tyres, electrical transformers, pharma, textile, fabric, railway locomotives, among other goods.

Source: https://auto.economictimes.indiatimes.com/news/industry/pandemic-disruptions-may-delay-gst-rates-revision-in-2022-too/81157403

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