GST Council Meeting Updates: Compensation to States, Petrol, Zomato Under GST, Key Agenda

 







GST Council Meeting Updates: The 45th Goods and Services Tax (GST) Council meet, the first in-person meeting in nearly two years, has started in Lucknow on Friday. From bringing petroleum products under the ambit of GST to extending the GST exemption on Covid-essential items, there has been a host of issues that are going to be discussed in the GST Council meeting on September 17. The Council will also likely to deliberate compenstation to states, rationalisation of an inverted duty structure on the supply chain of certain items among others.

“The GST council meeting this time would be a physical one, the first post the outbreak of the pandemic. The news about the discussion of including petroleum products under GST has increased the attention. Considering the fact that it’s a highly contentious issue due to its severe impact on the finances of both the states and the centre, no major decision is expected in this regard. The modalities of extending the compensation cess beyond 2022 are expected to be finalised during the meeting," said Divakar Vijayasarathy, founder and managing partner, DVS Advisors LLP.

Other key points that would be decided upon are launching of common portal both for registration and payment of taxes, inverted duty on certain products and other recommendations of GOM," he added.

The Centre on Friday is likely to discuss the details of extending the compensation cess and revenue shortfall to the states due to Covid-19 pandemic. During the inception of GST, the Centre had promised that it would compensate the state for any revenue loss in the first five years, starting July 1, 2017. In October 2020, the GST Council had agreed, in principle, to extend the compensation beyond the original five years. The shortfall is calculated assuming a 14 percent annual growth in GST revenue over the base year of 2015-16.

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