The 50th Goods and Services Tax (GST) Council meeting might be conducted on June 2023 and is led by the Union Finance Minister Nirmala Sitharaman. Taxation problems are the major agenda for the meeting as per the information.
GST appellate tribunals discussion shall witness notable progress, as anticipated. The central government has been urged by a group of industrialists for adopting the temporary provision to accept the plea via accepting the half amount via assessee.
The meeting of the council shall get held in June, but the date is not get fixed. It is been expected that the GST appellate tribunal does build considerable progress and that those states do enable to seek the formation of benches in their jurisdictions.
Since the system of tax would have been sustained, the officials would indeed mention that bigger GST rates and slab modification would not happen at the present time. At the present time, the complete redesign of the rate of structure does not get planned, as per the officials. Moreover the revisions and examinations in the rate of some items when needed and to prevent confusion.
The council does not take up the report which has been made by the Group of Ministers (GoM) in the former meeting i.e 49th GST Council Meeting. But it has been anticipated as an agenda for the 50th GST council.
The official mentioned that the same is been expected that the case shall get solved without the vote of the council.
A GST fitment panel is now defining the variety of millet goods and related rates. As per the sources, the fitment panel was comprised of authorities from the Center and states who categorize the products where millets are a critical part.
In the forthcoming GST Council meeting, which is expected to be conducted at the end of May or in June, the panel will probably make a classification recommendation.
Inverted Duty Structure (IDS) on Textiles
No timeline has been offered to rectify the inverted duty structure ((higher duty on raw materials and other inputs and lower duty on final product).
It is not just an economic issue but a much larger political one and considering the upcoming Gujarat assembly election, there is no chance of considering of inverted duty structure on textiles soon, said a senior Finance Ministry official.
In the month of December, the GST council would have chosen to postpone rectifying the inverted duty structure on the textile from 1st Jan 2022. It is planned that GoM on rationalization shall see into the problem and recommend the special rate post to the correction of the inverted duty structure. In its interim report, GoM thinks about the IDS amendment for some of the sectors and indeed upon the exemption. Currently, they used to work on making the other report, however, there shall be no declaration in the report that the textile sector will be discussed.
Experts Mentioned GST ITC Accumulation
Tax experts mentioned that accumulation of ITC because of the inverted duty structure in the textiles segment is an older problem, saying that ITC accumulation could be amended either by rationalizing input or output GST rates or by permitting the industry to claim the cash refund of the accumulated ITC. Also, there shall be seeing no intention of the government to open up the refund route, the surged GST rates were previously taken back because of the protests by the industry (particularly from Gujarat).
Restriction of Working Capital
It is important that the government does not lose sight of the fact that the delay in implementing corrective measures has been causing businesses to have an enormous blockage of working capital, besides inflationary pressure, he said. Moreover, the inverted structure is encouraging imports of synthetic textiles, furnishing a significant blow to domestic manufacturers (along with under the Production Linked Incentive Scheme).
Read Also: GST Impact on Textile Industry in India
Tax experts stated, that amendment in the case of inverted duty goods could be acquired through the rising rates of goods being sold, which could be recovered through increasing the cost of goods. In the former times, it revealed that when GST rates were offered to surge for the textile industry. Various players from the industry would have protested against it. Textile companies may experience temporary relief if rate corrections are postponed while input tax credits continue to accumulate. Furthermore, the recent correction to the formula for refunding IDS should provide the sector with other respites, he added.