NEW DELHI: After slashing rates on about 90 items in its July meet, the 30th GST Council meeting on Friday is unlikely to go for any major rate cut amid concerns over low tax collection. However, it may impose fresh cess on luxury items.
In the meeting, the council may consider a proposal from Kerala to levy Calamity Tax, a special tax or cess on luxury goods to raise additional resources to meet the cost of reconstruction in the aftermath of recent floods in the state.
On August 23, Kerala Finance Minister Thomas Isaac had said that he would approach the GST Council for a cess to finance the relief efforts.
While the industry has requested to cut tax rates on cement and some consumer goods items to boost dwindling demands, sources in the Finance Ministry ruled out any move from the government’s side that can impact revenue collection.
“There are demands on cutting rate on a host of items including cement, consumer goods and electronic items. Rate cut on cement alone will have a sizeable impact on revenue and I do not think the government can make any such move at this point, when GST collection still is below expectation. But this is election time, so there can be last-minute changes,” a senior official told TNIE.
As per budgetary estimates, the target for this year was to collect more than Rs 1 lakh crore per month in GST, but they were not met, barring in April when the collection was above Rs 1 lakh crore.
Also on agenda is a detailed discussion on the revenue deficit of all states and Union Territories which has shown a declining trend, and the new forms and compliance tools that are being worked up on after ICAI submitted its comment on the same.