GST Council meeting tomorrow: Opposition states likely to pressure Centre over compensation
The Telegraph has cited. These states have been experiencing revenue losses, and their representatives are likely to seek solutions during the allotted time. In 2017, India introduced the Goods and Services Tax (GST) regime.
The central government promised the states a 14% revenue growth for five years by levying a cess on luxury items. Although the compensation stopped in June 2022, the council agreed to extend the cess till March 2026 to repay loans due to revenue shortfall. To address reduced revenue collections during the pandemic, the Centre borrowed ₹2.69 lakh crore in 2020-21 and 2021-22, which was then allocated to states to cover their GST collection shortfall.
As per The Telegraph, officials said the Council should start deliberating on whether to continue collecting the cess beyond March 2026 and if so, how to share it with the states. The upcoming 50th meeting of the GST Council, slated for July 11, will cover a wide range of crucial topics. One of the key issues to be addressed is the taxation of online gaming.
A group of state finance ministers has left the decision to the Council on whether GST should be imposed at a rate of 28% on the full face value of bets or on the gross gaming revenue. Another important matter on the agenda is the tax treatment of non-fried snacks such as papads and kachris. Currently taxed at 18%, there is a proposal to either grant them full exemption from GST or impose a reduced rate of 5%.
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