GST Council meet today: From luxury hotels to lottery, what's on agenda?
New Delhi, Sep 20: GST Council, headed by Finance Minister Nirmala Sitharaman, will hold its 37th meeting in Goa on Friday amid demands from the industry for a fiscal stimulus.
The meeting is being held amid a strong call for GST rate cuts for industries, including automobiles, biscuits and FMCG, which have been hit hard by the ongoing economic slowdown.
In the meeting, the GST Council is likely to deliberate on the proposal of linking new GST registration with Aadhar and take the quarterly review of cases at National Anti-profiteering Authority (NAA), sources told PTI.
It is expected to discuss amendments in GST Laws to accommodate the creation of Jammu & Kashmir and Ladakh as UTs and will also discuss the proposal moved by Kerala on introducing e-way bill system for movement of gold and precious stones, sources told news agency PTI.
#GSTCouncil meets today in Goa. On my way.— Nirmala Sitharaman (@nsitharaman) September 19, 2019
With India's Gross Domestic Product (GDP) touching a six-year low of 5 per cent, and various sectors facing a severe downturn, the government is under pressure to take measures to boost consumption and demand by reducing the GST.
However, the task may not be easy as states are not in favour of a major rate cuts, especially on items that fetch higher revenue for them.
Here are things you need to look out for in today's meeting:
Tax rate cut on luxury hotels
The GST Council meeting is likely to bring relief to hotels and restaurants as the Centre on Wednesday said that it will take up the issue of "hefty" GST on hotel rooms tariff in the meeting.
The council is expected to cut tax rates on hotels that charge room tariff of ₹7,500 or more per night and currently attract 28% GST.
Prime Minister Narendra Modi in his Independent Day speech too had suggested promoting tourism was on the government's agenda.
Earlier this month, in Tourism Ministers' Conclave at Kovalam in Kerala, different states had unanimously expressed concern over 28% GST imposed on hotel rooms tariff over Rs 7,500 and 18% on rooms with tariffs between Rs 2,500 and Rs 7,500.
Tax cut on outdoor catering services
According to reports, the GST Council is likely to reduce on catering services. The Council will consider a rate cut on outdoor catering services which employs semi-skilled or unskilled labour.
As per state government official, differential rates between outdoor catering and restaurant services which are taxed at 5 per cent at the moment, had been an issue for some time.
Single rate for lottery tickets
The GST Council is also considering a uniform rate of 28 per cent for all lotteries. Currently, under the GST Act, there are two rates prescribed on the sale of lottery tickets - 12 per cent if the lotteries are sold within the same state, and 28 per cent if a state sells lottery tickets outside its jurisdiction.
Compliance relief for small businesses
The Council is expected to consider proposals for giving compliance relief to small businesses by exempting them from filing annual returns for the first two years of GST--FY18 and FY19.
Rate cut for biscuits, bakery products:
Leading biscuit makers are hoping for GST cut on widely consumed mass biscuits priced below Rs 100 a kilo as the increased instance of GST has put additional burden on manufacturers.
The fitment committee, however, decided not to tinker with the present GST structure for biscuits, bakery products, breakfast cereals, fruits and vegetables, mineral water, ready-to-eat packaged items, and several other food products.
Discussion on extension of GST cess
GST Council is expected to take a decision on automobile auto industry's demand of reducing GST on vehicles.
Automobile dealers' body FADA on Thursday urged the Council to take a decision on GST rate in the meeting. In a letter written to FM Sitharaman, FADA president Ashish Harsharaj Kale said customers have deferred their buying decisions in anticipation of a GST rate cut.