The GST Council, chaired by Finance Minister Nirmala Sitharaman, is due to meet on Wednesday.

Economists, analysts, corporates and market participants will look out for any major announcements on GST rates after the conclusion of the 38th meeting of the top decision-making body of the indirect tax regime. Ever since the roll-out of the GST or goods and services tax in July 2017, the Council has made a number of changes in the GST law, including tax rates and filing deadlines. The 38th meeting of the GST Council comes at a time when the government is staring at a widening fiscal deficit due to shrinking GST collections.

Here are 10 things to know about the GST Council:

1. The government on Monday released compensation worth Rs 35,298 crore to states and Union Territories.

2. This payment was owed to the states by the Centre since August 2019.

3. At the time of GST rollout, the states were promised compensation of 14 per cent, to make up for the loss in revenue on account of the taxes subsumed into the new indirect tax regime.

4. The corpus for paying compensation was collected by levying a cess on top of GST rates on tobacco products, cigarettes, aerated water, automobiles, and coal. This compensation was to be released after every two months.

5. GST collections came in at Rs 1,03,492 crore in November, according to official data released this month. That marked the third largest monthly collection of GST since the launch of the new indirect tax regime in July 2017.

6. However, GST collections have fallen short of the government's annual target, widening further the fiscal deficit, which occurs when a government's expenditure exceeds its revenue.

7. India's economy is struggling against a more than six-year low pace of economic growth. GDP or gross domestic product expanded 5 per cent in the quarter ended September.

8. The government has in the past few months announced a range of measures, from withdrawal of higher taxes on foreign investors to cut in corporate taxes to spur investments and push growth.

9. It has set a target of containing the fiscal deficit for the financial year ending in March 2020 at 3.3 per cent of GDP.

10. In its 37th meeting held in September, the GST Council more than doubled the tax rate applicable to caffeinated beverages to 40 per cent, while reducing it on hotel room tariffs.

Published On : 16-12-2019

Source : NDTV Profit