NEW DELHI: The Goods and Service Tax (GST) Council is likely to meet during the second week of June via video-conferencing, according to sources. The meeting will likely see members discuss the impact of the lockdown on tax collection and states’ compensation in the current situation.
“It is time to call the GST council meet, which is likely to happen in June,” a top finance ministry source said on Friday. And, despite the drastic fall in GST collections due to lockdown imposed for over two months, the finance ministry is not in favour of any hike in GST rate on even non-essential items since it feels that there is a need to boost the demand to support consumption post-lockdown.
“The matter of tax hike will likely come up. But, post the lockdown, demand has to be induced and economic activity has to improve on all fronts, not just on essential items. Who are we to decide what is non-essential? However, the final call will be taken by the council,” the source added. Another official in the ministry confirmed that the meeting will likely be held in June and will be conducted via video conferencing.
Since the council will be meeting for the first time after the nationwide lockdown went into effect, many important issues are set to be taken up.“The meeting will review the loss of revenue collections. It will also take up the matter of GST compensation and the mechanism to raise money from the market ahead of the next parliament session, where a wider discussion on the topic is likely to take place,” a senior official from the department of revenue said, adding that the GST collection numbers are likely to be disclosed by
August 1. Economists and experts have forecast that India will face its worst recession in 40 years this financial year, with its GDP contracting by as much as 5 per cent. This will certainly have a negative impact on revenue collection.
FinMin engaging with labour ministry over job losses
As many companies have given out pink slips and cut salaries amidst the pandemic, the Finance Ministry is engaging with the Labour Ministry over job losses in order to get a better picture of employment status, a top finance ministry official said. “This is a tough situation and many companies are experiencing financial difficulty. We are closely engaging with the labour ministry over the issue of employment, job loss and salary cuts,” the official added.