GST Council meet to consider rule changes

At the 48th GST Council meeting to be held virtually, central and state finance ministers will consider clarifying on provisions relating to e-invoicing requirement of businesses, treatment of statutory dues under GST law in the case of bankrupt businesses in tribunals, tax credit for corporate social security related spending and no-claim bonus offered by insurance companies, said the person requesting anonymity.

The series of rule changes are meant to rationalize legal provisions in the light of experience and jurisprudence evolved so far, the person said.

The Council, chaired by finance minister Nirmala Sitharaman, will also consider proposals to de-criminalise Central GST Act, Aadhaar- based biometric authentication of GST registrants, amendments on the timeline of tax refunds to exclude delays by the taxpayer and changes to various forms to improve reporting requirements, the person said. Efforts are now focused on de-criminalising GST law and bringing clarity to provisions even as a restructuring of the slabs and rates to restore tax neutrality of the indirect tax system is pending due to unfavourable economic conditions.An email sent to the finance ministry remained unanswered till press time.

Persistent high inflation has forced the GST Council to put on the backburner the restructuring plan that would have led to shifting some of the luxury items from the 18% to 28%.

Ministers will also consider raising the monetary threshold for launching prosecution for tax evasion, with the idea of improving business climate and ease of doing business, Mint reported on 14 December.

Ministers are also expected to finalize the structure of GST appellate tribunals, its composition and regional distribution at Saturday’s meeting. It is likely to take a view on whether there should be one GST appellate tribunal per state or whether one per region would suffice and how many members should be there from the Centre and states.

The Council will also consider the revenue position of states at the meeting. Monthly GST revenue receipts of Centre and states have remained above the ₹1.4 trillion mark for nine straight months till November, aided by economic recovery and better-than- expected growth in nominal gross domestic product. However, with economic growth expected to moderate towards the end of this fiscal, it remains to be seen whether the revenue collection stays around this level.