Karnataka Chief Minister Basavaraj Bommai-led group of ministers (GoM), which was set up last year by the GST Council to suggest ways for augmenting revenue by rationalising tax rates and correcting anomalies in the tax structure, is likely to meet on June 17. The panel of ministers is likely to discuss a proposal to shift rate slabs from the current five per cent to seven or eight per cent; and from 18 per cent to 20 per cent, sources told CNBC-TV18.
The GoM, which was given time to submit its final report before the next GST Council meet, might also discuss pruning the list of exempted items under the GST regime. The panel of state ministers may also discuss the proposal to correct inverted duty structure in textiles, the sources said.
An inverted duty structure refers to a situation where the tax rate on inputs purchased is higher than that on finished goods.
The GoM member states include Bihar, Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Goa and Kerala. The panel, which was set up in September last year, last met in November 2021. The GoM’s recommendations, once finalised, will be placed before the Council in the next meeting for a final decision. The GST Council, which is the highest decision-making body under the GST regime, is likely to meet in the last week of June.
In a major ruling, the Supreme Court last month said the GST Council is only a recommendatory body and its recommendations are not binding on the Centre or states. The court held that the recommendations of the GST Council will have a persuasive value. The Court also held that both Parliament and the state legislatures can equally legislate on the matters related to GST.
Currently, there are four GST slabs — 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The 18 per cent slab has 480 items, from which about 70 per cent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.
GST Collections in May hit an amount of Rs 1,40,885 crore, which was a 44 per cent year-on-year jump. However, it was a drop of 16 per cent as compared to the GST collections in April. The gross GST revenue collected in May 2022 was Rs 1,40,885 crore, of which CGST is Rs 25,036 crore, SGST is Rs 32,001 crore, IGST is Rs 73,345 crore (including Rs 37469 crore collected on import of goods) and cess is Rs 10,502 crore (including Rs 931 crore collected on import of goods).
This was only the fourth time the monthly GST collection crossed Rs 1.40-lakh-crore mark since the inception of GST and the third month at a stretch since March 2022. “The revenues for the month of May 2022 are 44 per cent higher than the GST revenues in the same month last year of Rs 97,821 crore. During the month, revenues from import of goods was 43 per cent higher and the revenues from domestic transaction (including import of services) are 44 per cent higher than the revenues from these sources during the same month last year,” said the finance ministry.
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