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49th GST Council Meeting
News: Recently, the Goods and Services Tax (GST) Council in its 49th Meeting has reached consensus on the constitution of the GST Appellate Tribunal to resolve the rising number of disputes under the old indirect tax regime.
About GST Council:
It was set up by the President as per Article 279A (1) of the amended Constitution.
The members of the Council include the Union Finance Minister (chairperson), the Union Minister of State (Finance) from the Centre while each state can nominate a minister in-charge of finance or taxation or any other minister as a member.
According to Article 279 of the Constitution, the council can make recommendations to the Union and the states on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws.
GST Appellate Tribunal
The council has approved the creation of a national tribunal mechanism with state benches for the redressal of disputes.
The Tribunal will resolve the rising number of disputes under the GST regime that are now clogging High Courts and other judicial fora.
Compensation Dues Cleared
It has cleared the balance of Rs 16,982 crore (for June 2022) and has finalized GST compensation of Rs 16,524 crore to six states/UTs including, Delhi, Karnataka, Odisha, Puducherry, Tamil Nadu, and Telangana.
Lower Penal Charges
Approved for lower penal charges for delayed filing of annual returns by businesses with a turnover of up to Rs 20 crore a year.
Approval has been given for Amnesty scheme for taxpayers unable to file statutory returns. The GST Amnesty Scheme was introduced to encourage non-filers to voluntarily come forward and file their GST returns by providing a one-time relief from late fees.
GST rate changes and exemptions
The GST rate on several items has been changed, such as pencil sharpeners, rab (liquid jaggery).
The Council also decided to extend the GST exemption to educational institutions and central and state educational boards from conducting entrance examinations through any authority, including the National Testing Agency.
The Council has decided to switch the compensation cess levied on pan masala and gutkha commodities from an ad valorem basis to a specific tax-based levy.
What are issues with GST?
Complex and difficult to understand – Owing to multiple tax rates, exemptions, compliance requirements.
High Tax rates - Some industries and goods are subject to high GST rates, which can make them unaffordable for many consumers.
Technical issues - Several reports of technical glitches in the GST network have come up, leading to delays in filing returns and claiming input tax credits.
Difficulty faced by Unorganized sector – The unorganized sector in Indian economy is bigger and they face significant issues complying with new tax regime.
Increased compliance burden - The GST regime has a lot of compliance requirements, including filing of returns, maintaining records, and regular audits. This can be a burden for businesses, especially small and medium enterprises.