Karnataka Urging to Drop the Proposed Increase in GST Rates

The news suggested that GOI is planning to increase the GST rate As per the recent update, The central government is planning to do changes in the slabs of Goods and Service Taxes (GSTs) soon. As per the rumors on various goods, in the same matter, the GST council is scheduled to meet on December 18 where the proposal to increase GST will be discussed. According to a recent update, Karnataka is going to oppose the decision at the meeting.

Due to the economic slowdown, the state hasn’t met targets for motor vehicle tax and stamps and registration duty, but other sectors were fine. Now the government is also worried that when the additional cess and a hike in GST rates Grab the information of revised GST slab rates on consumer products in India, Although the GST council finalized the slab rates like 5%, 12%, 18% and 28% will push up prices then there are possibilities of Falling demand for FMCG products such as hair oil, cosmetics, biscuits, and toothpaste.

BT Manohar, a member of the GST consultative council, also said that Centre needs to find a robust solution without burdening consumers, the GST rate increasing proposal will choke revenue flow to the state exchequer. It would burden the consumer and also result in higher inflation.

The economic slowdown had a direct impact on GST. And the collection of cess has fallen to Rs 10,000 crore, but once in two months, the Centre pays out Rs 21,000 crore to the state. Due to it, the government has failed to make the payments in the last four months which leads to owes states a total Rs 50,000 crore. Alone Karnatka has Arrears around Rs 7,039 crore.

Recently Karnataka has come with urging to drop the plan to increase compensation cess, with the same view, a senior finance department official said that Commercial tax collection is good but in current situation, a price hike will hit us hard, Individual states are putting their opinions at the GST Council which can be a part of an effort to put collective pressure on the Centre at the GST council meeting Get to know about GST (Goods and Services Tax) council 1st to 37th meeting updates and decisions taken by members. We have covered 1st meeting to last meeting decisions.