The GST council meeting for this year is scheduled to take place sometime in the middle of March, according to various media reports. The last GST Council meeting was hosted on 31st December 2021. Union Finance and Corporate Minister Nirmala Sitharaman presided over the meeting at the Vigyan Bhavan in New Delhi.
Some other prominent authorities present at the meeting were the two Union Ministers of State for Finance, namely Pankaj Choudhury and Dr Bhagwat Kishanrao Karad, the respective finance ministers of the states, union territories, and other senior officials.
The most significant decision taken at the meeting was to defer the 12% hike in GST on textile goods until the next meeting, which will supposedly take place in March 2022. Let us look at some of the main highlights as well as live updates from the latest GST Council Meeting.
Key Takeaways from the 46th GST Council meeting.
- Summary of the meeting, according to the press brief provided by the Union Finance Minister: The latest GST Council meeting was convened on an emergency basis with a two-day notice. The only topic of discussion on the agenda was the proposed hike on textiles. The Finance Minister of Gujarat had made an application to the Union Finance Minister requesting to reconsider the increase in Goods and Services Tax on textiles, as per the decision taken in the 45th GST Council meeting on 1st September 2021.
Following the petition, the Council deferred the hike on textiles, which was supposed to be 12% instead of the existing 5%. The said decision was referred to the committee overseeing rate rationalisation, and they were supposed to submit a report by February 2022.
- No mention of GST hike on footwear: According to the clarification provided by the Finance Minister, there was no discussion on the GST hike on footwear, and no GST officials opined anything in this regard since it was not on the agenda of the Council. Hence, from 1st January 2022, footwear will come with the new GST rate of 12%.
Live Updates from the 46th GST Council Meeting
3:52 pm: Compensation cess was not discussed, despite some State Ministers mentioning it.
3:40 pm: Discussion on the issue of inversion of tax and revenue took place. The final decision is to be made by the rate rationalisation committee, which will present its full report in February 2022.
3:34 pm: Decision to maintain the status quo on the GST on textiles. Nirmala Sitharaman finalised two corrections on inversions in the September 2021 GST Council meeting held in Lucknow. Of late, State ministers have sent representation requesting reconsideration of a rate increase of tax on textiles, following which the status quo of 5% instead of 12% was maintained.
3:26 pm: Finance Minister Nirmala Sitharaman calls the press and gives the briefing on the GST Council meeting.
2:00 pm: End of the GST meeting according to sources. The Group of Ministers (GoM) will work for an extended period to rationalise the rates.
12:56 pm: According to sources, the GST Council has decided to postpone the hike of taxes from 5% to 12% to a later date. The matter will be taken up by the next GST Council with a new roadmap.
12: 25 pm: The Finance Minister of Tamil Nadu proposed to the Council that 12 % GST should be reserved for textile merchandise valued at Rs 3,000-5,000 per unit, while merchandise valued below Rs 3,000 shall continue to be charged at 5% GST, like before.
11:10 am: The 46th GST Council Meeting begins in New Delhi. Union Finance Minister to preside as the Chair, while the Ministers of State for Finance would also be attending the discussion.
Structure of the GST Council Meeting
As the apex committee which oversees the taxation regulations on goods and services all over India, the GST Council is headed by the Union Finance Minister, along with the finance ministers of each state being members of the council.
As per the regulations provided in Article 279(1) of the Indian Constitution, the GST Council is formed by the President of India, where the Union Finance Minister will act as the chairperson. The responsibility of Revenue of Finance will be overseen by the Union Minister of State. Other members will be the Ministers in charge of finance or taxation as nominated by their respective State Governments.
Expectations from the meeting
Prior to the hosting of the 46th GST Council meeting, there were certain expectations about its outcomes, especially regarding rate rationalisation. In the previous meeting of the Council, it was declared by the Union Finance Minister that a Group of Ministries (GoM) had been organised to investigate the rate rationalisation of certain merchandise.
Since the states had been petitioning to extend the compensation cess on GST till June 2022, chances were there that the GoM’s tenure would be extended. This was to enable the group to come to a unanimous decision regarding suggested rate increases and mergers of the 12% and 18% GST slabs. It was also expected that the GST hike on textiles and footwear by 12% would be deferred or rolled back.
Probable topics of discussion in the 47th GST Council meeting
According to an announcement by the Union Finance Minister in February 2022, aviation turbine fuel (ATF) is likely to be included under the GST regime, and would be the key topic on the agenda for the 47th GST Council meeting. This topic was given importance after a petition by SpiceJet’s Founder, Mr. Ajay Singh, who proposed that bringing ATF into GST would revive the civil aviation industry. At present, excise duty is levied on ATF, which increases with the surge in fuel prices.