The Goods and Services Tax (GST) Council is likely to hold its 37th meeting in Goa on the 20th of September, without considering any rate reduction. The GST Council meeting needs to be held at least once in three months and since the Goa government had offered to host the meeting, it was accepted.
The biscuit companies are seeking a GST rate cut from 18 percent as consumers are thinking twice before buying even a ₹5 product. In addition, the automobile sector has also requested the government to lower the duty for a short period. During her press conference last week, when asked about the demand to lower the GST rates on biscuits, Finance Minister Nirmala Sitharaman said if State Finance Ministers think that branded companies are shutting down because of GST, she would definitely hear from them.
She had said, “After all, the GST Council is not just the Union government. I would want many of the GST related issues discussed as issues that affect the States too and GST related decisions are not unilaterally taken by the Central government. So, I like to hear State Ministers much before all of us together take a call on it.”
A senior official in the Finance Ministry said, “Many sectors are clamoring for a rate reduction. They range from automobile to cement to biscuits. Now, if it is done for one sector, it can open floodgates. We should not forget the revenue situation.” The official also added that ‘as of now’ there is no proposal for lowering rate on any of the items as the ministry is struggling on the revenue front.
The average revenue collection of just over ₹1 lakh Crore during the current fiscal is sufficient to meet the scaled-down target of GST collection. In the budget, the Finance Minister scaled-down the GST collection target from ₹7.61 lakh Crore to ₹6.63 lakh Crore. However, setting the target lower does not mean that the government wants less revenue. On the contrary, it needs more funds to meet the rising expenditure and contain the fiscal deficit.