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Overhaul of GST system likely at March 14 meeting

Last Updated 22 May 2020, 10:44 IST

Amid souring relationship between the Centre and the states over non-payment of compensation cess, the next GST Council meeting is expected to take place on March 14.

The meeting is significant as it comes at a time when the union budget has raised customs duty on a number of items, making products associated with them, costlier in the Indian market.

Sources said the first GST Council meeting after the budget, is expected to make some major overhauls related to the rate structure, rate revision and prepare a strategy for GST revenue collection keeping in mind, the target set in the Budget is not breached by a wide margin.

How to keep a tab on rising prices of food items may be the prime focus of the GST Council this time around as the rate of food price rise has reached a new high and there is a fear that it may start impacting non-food items, too in the long run.

The Council, which is expected to discuss the issue of keeping the rate structure to a maximum of three from five at present, may float a single slab for all edible goods, to check the volatility in food prices.

The Council may also try to evolve a consensus on rate revision of goods and services only once in a year to remove uncertainty for businesses and the consumer.

Tax evasion a hurdle

One of the major hurdles of the GST system is the tax evasion and claim of excess or wrongful tax rebates.

The GST Council is expected to devote a little longer time on making the system fool-proof.

According to the 15th Finance Commission, India’s overall tax-to-GDP ratio is about 17.2%, which, as per its calculations, should be about 22.6%.

There is a gap of about 5.4%, of which GST compliance gap accounts for about 2.4% of GDP, the commission recently said, suggesting the government speed up action to check fraudulent.

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(Published 16 February 2020, 15:16 IST)

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