After a gap of 7 months the GST council will meet on Friday and as the Finance Minister chairs this meet there is a long list of to do's and a longer list of demands to go through.
States Compensation
The 43rd meeting is likely to pick up at exactly the same spot where the meet on October 5 left off at the discussion of state compensation. The centre has already indicated to states that there will be a gap between the compensation need and amount raised through cess.The shortfall in GST compensation payable to states in the current fiscal is estimated at Rs 2.69 lakh crore.
Under GST law, states were guaranteed to be compensated bi-monthly for any loss of revenue in the first five years of the GST implementation from July 1, 2017.
Rate reduction for medical essentials
The council will take up GST rate on vaccines though the stage seems to be divided on the topic. Some states want a nominal levy while the Centre holds the opinion that this will adversely affect manufacturers in claiming input credit and thus causing hinderance to vaccine productions.
States have asked the centre to consider GST exemption on hand sanitisers, face masks, gloves, PPE Kits, temperature scanners, oximeters, ventilators, and the likes.
Rectifying inverted duty structure
Reports indicate the govt may address the trouble of the inverted duty structures in key sectors that ends up making import duties on input goods higher than on finished goods.
Boost for two-wheelers
The council may also consider lowering of GST rate of 28 percent on two-wheelers to give a boost to its sales affected during the pandemic as per reports.
The Fuel Debate
Natural Gas may get added to the three tier structure of GST but adding in petrol or diesel into the ambit at a time when compensation gap is anyway widening seems like a unlikely possibility as per govt officials. 14 fuel prices hikes this month with record high prices at pump largely owing to high taxes is adding pressure on the centre to take up fuel under GST.