30th GST Council Meeting held on 28th September, 2018 by Video Conferencing

GST Council, the highest decision-making body of Goods and Services Tax (GST) regime has decided to set up seven-member Group of Ministers (GoM). It was decided in 30th meeting of the GST Council held in New Delhi.

A seven-member Group of Ministers (GoM)formed will  look into the following verticals and submit a report of recommendations to the GST council by 31st October 2018 on the following issues:

a. Imposition of cess under GST to provide relief to Kerala flood victims – Kerala Government pitched to the GST Council to charge a 10% cess to recover the loss due to floods. The GoM is to take a call on whether or not the proposed cess must come into effect and who must bear the same.

b. A temporary tax under GST to help states in exigencies: GoM is to look into the long-term implications of levying state cess. This cess will be levied on the commodities for a temporary period, subject to notification. However, an additional 1% tax on selected items was discussed in the meeting.

c. Other Issues to be looked by GoM: The committee will look into the issues such as whether the temporary tax should be levied only in the state concerned or should it be an all-India imposition. Also, a class of goods subject to this tax must be proposed and decided.

It will also to look into whether the National Disaster Response Fund (NDRF)/State Disaster Response Fund (SDRF) mechanism is enough to deal with the calamities and the situations where calamity tax can be legally imposed under GST.

Discussion on revenue positions of all the states 

The graph of the GST revenue collection showed that states showed 16% shortfall in the first year of its implementation. This shortfall has been reduced to 13% in April – Aug 2018. Finance minister Arun Jaitley stated that the deficit is expected to neutralize itself within 5 years of GST’s rollout.

As per the analysis based on the facts mentioned above, the future rate cuts in the goods and services will depend on the increase in revenue collections in all the states in the coming months.