The 46th GST Council meeting has been chaired by FM Nirmala Sitharaman in New Delhi with the presence of all states’ finance ministers and other members. The council members have opposed the new 12% GST rate on textile products so they have deferred the hike tax rate and will discuss it in the next meeting.
The rules of the process and execution of the business in the GST council mentioned that the meeting is to be done at least one time towards every quarter of the fiscal year. The last 45th GST council meeting took place on 17th Sept 2021.
GST Council 46th Meeting All Updates
- The decision to amend the inversion in textiles gets referred to the rate rationalization committee, mentioned by FM Nirmala Sitharaman. Committee’s full report is to be submitted in February 2022. No decision was opted by the GST officials on the problem of reversing the surge in rate on the footwear industry.
- As for the textiles industry, GST officials have decided to maintain the status quo. In September 2020, the Lucknow GST official meeting had agreed to do the correction on two investors mentioned by FM Nirmala Sitharaman. In recent times, representatives were appointed by state finance ministers to acknowledge the change in rate on textiles. Presently, the same have decided to maintain the status quo and not surge the rate from 5% to 12% on textiles.
- Under the emergency provisions, a 46th GST meet was conducted by FM Nirmala Sitharaman. Approximately 10 items have been discussed about the methods of rectifying the inversion since 2019.
- The 12% rate on the textile industry scrapped as of now which was to come in effect from 1st Jan 2022.
GST Council 46th Meeting Press Release in PDF Format
Expectations of 46th Council GST Meeting on Inverted Duty Structure
In the separate pre-budget meeting with Sitharaman the authorities and the representatives of states and UTs, Tamil Nadu Finance Minister P Thiagarajan and Rajasthan Technical Education Minister Subhash Garg mentioned that the major purpose of the meeting would be towards doing the conversation on the surge in the rates in textiles to amend the correct inverted duty structure.
The main agenda is to discuss the inverted duty structure on textile and the possible rollback of the same to improve the textile industry and its relevant business.
On the 45th meet conducted in Lucknow on 17th September, the decision would be taken by GST officials to improve the inverted duty structure for footwear as well as textiles. The surged price on the textiles was raised to 12% from 1st Jan 2022. Before that, the same was levied with 5% with the sale value of Rs 1000 per piece for the case of apparel and per pair towards the footwear.
No Proposal to Bring Petrol, Diesel Under GST
Beneath the new taxation regime, the GST official does not suggest drawing the products of petroleum products despite some specific representations that have been performed to the government to engage the petrol and diesel in GST. The excise duty on the petrol is marked regularly towards generating the resources for the infrastructure and the additional items of development for expenditure said Minister of State for Finance Pankaj Chaudhary
As per the date mentioned there are various costs which consist of 4 main 5, 12, 18 and 28 per cent as well as some special rates before-mentioned as 0, 0.25, 1 and 3 per cent. It is thinking from the more extended time to lower down the number of costs and the purpose was to integrate 12% and 18% and mentioned the consolidated rate of 15%. There are distinct other alliances that are indeed beneath the consideration.
A group of ministers is seeing the current GST rate slab structure which consists of the special rates. The group beneath the convenorship of Karnataka Chief Minister Basavraj S Bommai urged to suggest the rationalization measures, including the merger of tax rate slabs, needed towards easier rate slab. This group was formed dated September 24 and was urged to submit its report in 2 months.
“It is expected that GoM’s report will be ready before the next meeting so that the Council could consider and decide the next course of action,” the finance ministry commented. GoMs is urged to recommend the amendment which might be executed in a quicker way and the roadmap to execute the revision which must be executed in the short and medium-term.
Additional Concerns
The other points of reference towards the GoM on the rate rationalization consist of reviewing the supply of goods and services privilege beneath GST with the plan to elongate the tax base and diminish the breaking the chain of input tax credit and verify the instances of the inverted duty structure for textile and footwear industry.
Inverted Duty Structure is identical to the higher duty inputs and lower duty on the output. It means that a higher refund to the industry influences the cash flows towards the firms and revenue collections for the government. Indeed the consumers shall not avail anything. In the former year, the council rectified that IDS on the mobile handset while this September, it has been rendered to amend the discrepancies upon textile and footwear from 1st Jan 2022.
The council specified that there are still some items like fertilizers “It is not just the government that has an issue with the IDS. Industry too has a tough time because their working capital gets blocked as GST paid at higher rates on inputs is blocked till the grant of refund, he asked.”
At the same time, the businesses complain that the refund process is a complex process and thus much more time is being consumed. Before that, in a year while revealing the budget Finance Minister Nirmala Sitharaman mentioned that the GST officials have resolved the hurdles difficulty.
“As Chairperson of the Council, I want to assure the House that we shall take every possible measure to smoothen the GST further, and remove anomalies such as the inverted duty structure, she mentioned.”
