The Goods and Survives Tax (GST) Council meeting is underway in the capital, which is expected to please the middle class as the decision is likely to bring down prices of white goods such as cameras, dishwashers and cement, one of the key inputs for housing construction.

The recent statement of Prime Minister Narendra Modi has raised hopes of the middle class, a key constituency that no government can afford to alienate, especially when the General Election is months away. On Tuesday, Modi had indicated that his government would bring down tax rates of several goods and services to provide relief to the common man. He had hinted that his government was making efforts to bring down 99% items in the top tax slab of 28% to 18% or less.

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Government officials and industry executives say that the government might remove most of about three-dozen items from the top slab barring sin items such as pan masala, aerated drinks and tobacco products. A final announcement regarding rates rationalization and procedural changes is expected this evening after the GST Council meeting is over, government officials said.

The meeting, Chaired by Finance Minister Arun Jaitley is currently in progress at Vigyan Bhawan, New Delhi. The meeting is attended by representatives of council including Tamil Nadu Fisheries Minister D Jayakumar, Delhi Finance Minister Manish Sisodia, West Bengal Finance Minister Amit Mitra, Karnataka Rural Development and Panchayat Raj Minister Krishna Byre Gowda, Finance Minister of Kerala TM Thomas Isaac, Haryana Finance Minister Captain Abhimanyu and Punjab Finance Ministers Manpreet Singh Badal.

The expected tweaking of GST rates had invited sharp reactions from the opposition because they always maintained that the indirect tax reform way hastily implemented without the proper ground work. While Congress President Rahul Gandhi said that the NDA government had been finally compelled to prune tax rates, his party’s stand, after criticizing the idea as the Congress Party’s ‘Grand Stupid Thought’.

Meanwhile, ex finance minister and former senior leader of BJP, Yashwant Sinha wrote in his latest book that the government has “botched” up GST, a simple taxation system that eliminates any tax on tax and brings down prices.

“It is a better tax, but Modi-Jaitley botched it up at its very beginning. That GST has been tweaked 200 times already and over 400 notifications and 100 circulars and FAQs have been issued since its launch is standing testimony to the folly of the Modi-Jaitley team”. The book “India Unmade: How the Modi Government Broke the Economy”, is published by Juggernaut.

A government official said that the proposed reduction of GST rates would invite criticisms from members belonging to the non-BJP states because that would have revenue implications. “The average monthly GST collection is still short of Rs 1 trillion (Rs 1,00.000 crore), baring an exception for one month,” the official, who did not wish to be named, said. The average GST revenue collection in the current financial year is Rs 97,040 crore per month.

The Council is also expected to discuss the need to further relax procedures for the benefit of small and medium enterprises and review refund-related rules that have hit exporters. The council may also consider the issue of transferring ownership of the GST Network in a government-owned company.

(With inputs from agencies)

First Published: Dec 22, 2018 15:34 IST

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