The meeting is expected to announce a few other Covid relief measures, however, particularly on compliance issues.
He will also announce some measures to correct the reverse duty while discussing the compensatory contribution for the housing tax occurring in 2021-2022.
Two other important points, including lowering GST rates for two-wheelers and integrating natural gas into the fold of indirect taxes, could also be on the agenda for discussions.
“Finance Minister Smt. @Nsitharaman will chair the 45th GST Council meeting at 11 am in Lucknow today. The meeting will be attended by MOS Shri @mppchaudhary in addition to state and UT finance ministers and senior Union and state government officials, ”the finance ministry said in a tweet.
The GST Council has already met twice this year when the panel of finance ministers discussed the GST compensation and the borrowing formula offered by the Center to compensate states for the GST deficit. while announcing a series of duty relief and relaxation of compliance measures towards Covid relief.
The 45th board meeting is set to discuss the issue of compensation for the current year again, but sources said it may also take some steps to correct the reverse tariff structure without pursuing any rate hikes in the GST or move towards a convergence of the GST at three rates. structure.
Sources also said that the council at the meeting may also address two other important points, including lowering GST rates for two-wheelers and bringing natural gas into the fold of the indirect tax.
An important source at the Ministry of Finance said that correcting reverse duties, reducing the GST on two-wheelers, and including natural gas in the GST fold are on the agenda and hopefully that the board will come up with a solution that is in the best interests of all stakeholders.
The correction of the inverted service structure, especially in sectors such as fertilizers, steel utensils, solar modules, tractors, tires, electrical transformers, pharmaceuticals, textiles, fabrics, locomotives railway, among other things, is required.
Reverse duty refers to tax rates on inputs that are higher than those levied on finished products. This results in higher input credit claims by commodities in addition to several administrative and compliance issues.
Currently, while the duty on imported tires is 10 per cent, its inputs, ie rubber, are subject to a duty of 20 per cent. Likewise, solar modules are not subject to any duty while their components are subject to duties of 5 to 10 per cent.
Likewise, the council could also consider lowering the 28% GST rate on two-wheelers to boost its affected sales during the pandemic.
The Council has in principle agreed to include five petroleum products in the GST, but has so far deferred its actual inclusion in the indirect because states fear a big loss of revenue. But now the government is considering introducing natural gas under the Goods and Services Tax (GST) regime because it would be difficult to immediately subject the entire oil and gas sector to it.
Sources said natural gas could be included in a three-tiered GST structure where rates would vary based on usage. So while piped natural gas (PNG) for homes can be kept at a lower rate of 5%, commercial piped gas can attract the median GST rate of 18% and CNG for automotive fuel can be kept in. the highest bracket of 28%. .