GSCT Council meeting today: Union Finance Minister Arun Jaitley at the 22nd meeting of the Goods and Services Tax (GST) council, in New Delhi on Friday. PTI Photo by Manvender Vashist GSCT Council meeting today: Union Finance Minister Arun Jaitley at the 22nd meeting of the Goods and Services Tax (GST) council, in New Delhi on Friday. PTI Photo by Manvender Vashist

The 23rd meeting of the Goods and Services Tax Council Council is scheduled to be convened on Friday in Guwahati, Assam. In a bid to provide relief to consumers, the Council may consider pruning items in the 28 per cent tax slab and slash rates for daily use items, plastic products and hand-made furniture.

Official sources told PTI that nearly four months after the GST was rolled out, the panel headed by Finance Minister Arun Jaitley will look at the most comprehensive overhaul of rates, easing returns filing and providing more relief to small and medium enterprises. The 23rd meeting of the Council will also discuss the suggestions made by Assam Finance Minister Himanta Biswa Sarma-headed GoM to cut tax rates for the composition scheme businesses to 1 per cent and lower rates for non-AC restaurants.

Comprising of state finance ministers, the Council is also likely to review the GST returns filing cycle and make it more taxpayer friendly. It may also look at rationalising rates in certain sectors where the total incidence of taxation has gone up because the goods were either exempt from excise or attracted lower VAT rates under the previous indirect tax regime.

After estimating the impact on revenue, a rationalisation of items in the 28 per cent tax bracket is also expected as the Council tries to accommodate industry concerns on tax rates. “Most of the daily-use items like shampoo could be lowered to 18 per cent. Tax rate on items like furniture, electric switches and plastic pipes could be relooked at,” an official told PTI.

Aside from this, the GST Council may also decide to allow businesses in inter-state trade to opt for the arrangement as per the Group of Ministers (GoM) recommendations. Making the composition scheme more attractive is also on the agenda. The GoM had also suggested slashing tax rate to 1 per cent for manufacturers and restaurants opting for the scheme from 2 per cent and 5 per cent, respectively.

The GoM was in favour of doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under the composition scheme and tax them at a flat 12 per cent. As of now, non-AC restaurants are taxed at 18 per cent. It also suggested that eating out at hotels that have room tariff of more than Rs 7,500 should attract a uniform 18 per cent rate instead of any separate category for 5-star hotel, which currently falls under the 28 per cent bracket.

Meanwhile, Puducherry and Karnataka had expressed concerns on Thursday about the delay in revenue buoyancy and the sustainability of compensation payout to states/UTs in the goods and services tax regime. They argued that the lower rate of compliance under the tax reform is indicative of tax evasion. They also added that this is the right time for the government to bring real estate, petroleum and electricity under the ambit of the GST.

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