FM Sitharaman to chair 46th GST Council meet today; what's on the agenda?

Finance Minister Nirmala Sitharaman is going to chair the 46th GST Council meet on Friday (December 31) and will likely discuss the report of the panel of state ministers on rate rationalisation, proposed GST hike in textile, among other things. 

The Council members will meet in person and will also deliberate on correction in duty inversion in certain goods. 
The meeting will be an extension to the pre-budget meeting of FM Sitharaman with state finance ministers on Thursday (December 30). 

The Group of Ministers (GoM) on rate rationalisation, who were tasked to review items under an inverted duty structure in order to help minimise refund payout, will submit a report to the Council.

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Besides, the Fitment committee, comprising tax officers from states and the Centre, has made many "sweeping" recommendations to the GoM regarding slab and rate changes and taking items out of the exemption list.

Currently, GST is a four-tier slab structure of 5, 12, 18 and 28 per cent. Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. On the top of the highest slab, a cess is levied on luxury and demerit goods.

There have been demands for merging the 12 and 18 per cent slabs as also taking out certain items from the exempt category to balance the impact of slab rationalisation on revenue.

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West Bengal's former finance minister Amit Mitra has urged the Union finance minister to roll back a proposed hike in textile from 5 per cent to 12 per cent saying this would lead to closure of around one lakh textile units and 15 lakh job losses.

Telangana Industries Minister KT Rama Rao has also urged the Centre to withdraw its proposed plan to increase GST rates.

Industry has also opposed the rise in tax from five per cent, citing higher compliance cost especially for the unorganised sector and MSMEs besides making the poor man's clothing expensive.

(With inputs from PTI.)