Economic Policy
GST Council keeps tax rate same, but defers key reforms
- The Goods and Services Tax (GST) Council met over video conference under the chairmanship of Union Finance Minister Nirmala Sitharaman
- Important decisions taken at the council
- Decision to scrap the 5% GST levy on a cattle feed ingredient — husk of pulses
- Reduction of the levy on ethyl alcohol used by refineries to blend with petrol to 5% from 18%
- Extending the 5% tax levy for ethyl alcohol, allowed for oil marketing companies to blend with petrol, to refineries will further reduce our dependence on imported crude and save the foreign exchange.
- Decriminalisation of petty GST offenses.
- Doubling of threshold limits of tax amounts for initiating prosecution from ₹1 crore to ₹2 crore for all offences other than those involving fake invoices.
- The compounding amount under certain offenses has been reduced from 50% to 150% of the amount, to 25% to 100% of the amount involved
- However, the decisions would take time to implement as States would have to amend their respective GST legislations, while the Centre would include these changes in the Finance Bill of 2023-24.
About GST:
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- GST was launched on July 1, 2017 through 101st Constitution Amendment Act, 2016 by amending the Artcile 279A
- GST had replaced the old Indirect tax regime in India
- It was introduced with the idea of “One Nation- One Market- One Tax”.
- 2022 marks the Fifth Anniversary of GST.
- GST is an indirect, multi-stage, consumption-based tax system. It subsumes several domestic indirect taxes like service tax, purchase tax, value-added tax, excise duty, and others under one head.
- It does not include Petroleum, Liquor, and stamp duty.
- The Three taxes application under the GST are CGST (Central) SGST (State) and IGST (integrated)
- The Four tax slabs are 5%, 12%, 18%, 28%.
About GST Council
- It is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
- 2. It is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.
