Union Finance Minister Nirmala Sitharaman said on Thursday that the 47th meeting of the Goods and Services Tax (GST) Council will be held in Srinagar on June 28 and 29, 2022.
before this, GST The council meeting was scheduled for April, but due to other commitments of the FM, the meeting had to be postponed to the next month.
In the meeting, the issue of compensation will be raised as several non-BJP states are pushing for extension of the GST compensation mechanism for more than five years ending in June 2022.
Several states are pressing the Narendra Modi government to extend a program to continue to offset losses from the GST or risk stagnation in efforts to further simplify the structure. It is by far the biggest challenge to the country’s most important tax reform in decades.
Finance ministers of opposition-led Kerala, West Bengal and Chhattisgarh have said they will take up the issue in the GST Council meeting this month.
Tamil Nadu and Bihar, states ruled by an ally of PM Modi, will also support the push, a . According to bloomberg report good.
The top court has encouraged states to take over the federal administration after the GST Council’s decision last month to be non-binding. If a council headed by a federal finance minister does not agree, states can unilaterally raise revenue with other taxes which goes against a push to standardize such duties across the country.
TS Singh Deo, finance chief of mineral-rich Chhattisgarh said, “This is not a tussle of arrogance between the Center and the states. The idea is to ensure an increase in revenue and if it does not happen through the council then it will have to be done by other means. It should have been ‘one nation one tax’ and not ‘one nation one budget’.”
gst law
Under the GST law, the federal government would have to give states their tax-making powers and compensate them for five years until June 2022, to gain their support for a consumption tax. The cost of the program in this period was $103 billion. Many states want to continue this as it has become a major source of income for salaries, subsidies and infrastructure development.
The BJP and its allies govern 17 of India’s 28 states, as well as one of the three federal territories that have an elected legislature. Five other provinces are administered directly by the federal government.
Meeting the demands of states could complicate finances at a time when Asia’s third-largest economy is grappling with rising prices as recovery picks up after a pandemic-induced slowdown. According to analysts at Nomura Holdings, the government’s $26 billion inflation-fighting plan has widened the fiscal deficit for the current year to 6.8% of GDP, up from 6.4%.
The federal government has only paid GST compensation to the states pending June payments till the end of May.
Last year, the council extended the duration of a levy that funds states for compensation and said the money collected would go to service compensation money borrowed during the pandemic.