New Delhi The GST Council will discuss the impact of COVID-19 on tax revenue on Friday, as well as talks on how to prepare a framework for compensation payments to states, sources said. The 40th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman and state counterparts, will take place through video conferencing.
According to tax experts, at present, the government has no financial scope to change the GST rates on goods. But the council can decide on ways to raise money to compensate the revenue loss to the states due to the implementation of the Goods and Services Tax (GST). Sources said that the meeting will discuss the impact of the epidemic on the revenue of the Center and states and ways to reduce the revenue gap.
With reduced collections and extended deadlines for filing returns, the government has not released monthly GST revenue collection figures for the months of April and May.
At the last council meeting on March 14, 2020, Sitharaman had said that the Center would look into the legality of borrowing from the market to meet the compensation requirements of the GST Council.
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It is noteworthy that under GST structure, 5, 12, 18 and 28 percent slabs are taxed. Above the highest tax slab, a cess is levied on luxury, and demerit goods and the proceeds from the same are used to compensate states for any revenue loss.
Recently, in a program of industrial organization FICCI, Finance Minister Nirmala Sitharaman had said on the GST rate cut that the decision is taken by the GST Council, but the Council is also looking for or worried about revenue collection.
