“Look at how often the (GST) Council meets, how committees deliver reports? I must say there is still a lot of room for improvement, relative at least to the professional career I came from,” Thiaga Rajan said in November.
Pending GoM reports
The second matter highlighted by Thiaga Rajan is even more important as the Council has little purpose to meet if it has no reports to discuss.
Consider the Group of Ministers (GoM) led by Karnataka Chief Minister B Bommai, which is yet to submit its report on GST rate rationalisation.
The Bommai-led GoM, constituted in September 2021, was in the Chandigarh meeting given three months to finalise its report, which must deal with key issues including the structure of the GST system itself and recommending rate rationalisation and merger of tax slabs to make it simpler.
The report is still awaited.
“I don’t think they (Bommai-led GoM) will do anything before the general elections. Everybody is hyper-political for the next 14 months,” a senior finance ministry official told Moneycontrol on condition of anonymity.
Then there is the GoM led by Meghalaya Chief Minister Conrad Sangma on taxation of casinos, race courses, and online gaming. The GoM submitted its report to the GST Council in December but it failed to reach a consensus as Goa’s representative on the Council opposed the treatment of casinos on par with online gaming and race courses. As such, the Council is unlikely to touch the matter on February 18.
A third GoM report, dealing with GST systems reforms, is also a work in progress. The group was formed in September 2021.
Tackling issues
This is not to say the GST Council is not making headway. In recent meetings, it has focused on correcting the inverted duty structure on some items, expanding the tax base, decriminalising offences, and altered the tax rate on some goods.
On February 18, the Council is expected to approve a GoM report recommending the formation of a national appellate tribunal and another on capacity-based taxation on certain evasion-prone sectors such as pan masala and sand mining, Moneycontrol has reported.
Decisions may also be taken to provide some relief to coal washeries by extending the exemption from compensation cess on coal rejects supplied to and by them, bringing tax parity between Indian and foreign shipping lines to Indian exporters, and even rate cuts for some items such as pencil sharpeners and millet-based health products.
Even so, given the crucial nature of GST and the recognition that parts of it need an overhaul, much work lies ahead of the Council.
