The GST Council meeting is chaired by Finance Minister Nirmala Sitharaman on Thursday where the Council is said to discuss issues such as compensation to states.
The 41st meeting of the Goods and Services Tax (GST) Council, is held via video conferencing.
The two-wheeler manufacturers are hoping that the long pending proposal to cut tax on two-wheelers would be discussed by the Council today.
At present, two-wheelers attract 28 per cent GST and the industry has been demanding that the rate ought to be brought down to 18 per cent in order to spur demand.
Sources are being reported as saying that this proposal could be sent to the fitment council for approval.
Will the government announce a surprise GST rate cuts for four wheelers too?
The meeting is very crucial since the council will be meeting to discuss exactly what the compensation to states would be amidst falling GST and Cess collection. There had been a further backlash after the revenue secretary had expressed the inability of the Centre to pay compensation to states in the future while reporting to a Parliamentary panel.
In a tweet, Kerala Finance Minister Thomas Isaac said, "The solution to GST embroglio is Central Govt to empower GST Council to borrow for meeting the compensation requirement, if necessary through an ordinance, on the strength of future receipts of an extended levy of compensation cess beyond 5 years by an appropriate notification.
Ahead of the meeting, chief ministers of opposition-ruled states got together on Wednesday to devise a common strategy on the issue.
States like Kerala, Punjab and Bihar have already said that the Centre is morally bound to make good any shortfall in GST revenues to them in the first five years of implementation of the regime that subsumed 17 different central and state taxes.
Congress President Sonia Gandhi set the tone for the GST Council meeting by calling the Centre's refusal to reimburse the states as nothing short of betrayal of the people by the Modi government. "We have to work together and fight together against the Central government," Gandhi said at the meeting.
However, the GST revenue growth was less than anticipated. Even three years after the GST rollout, monthly mop-up has remained under Rs 1 lakh crore. Meanwhile, Union finance ministry sources said all solutions will be discussed at Thursday’s GST Council meeting.