GST mop-up in October — concerning mostly September transactions — came in at Rs 95,380 crore, 5.29% lower than in the year-ago month.
Given that a shortfall in Goods and Service Tax (GST) collections is threatening to upset the budget maths of both the Centre and states and the former has even started defaulting on paying the constitutionally guaranteed compensation amounts to the latter, the GST Council’s next session on December 18 might see hikes in tax rates on a host of items and a pruning of the 156-strong list of exempt items.
Besides, the compensation cess, now levied on all the 34 items in the highest tax bracket of 28%, could be hiked and may also be imposed on a clutch of items in the lower slabs.
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The Council might also formulate alternatives to compensate states as the source fund has proved to be inadequate. However, the GST slabs as such might not see a revision at this juncture, as this requires a comprehensive policy review.
Since the GST’s July 2017 launch, there have been several rounds of rate cuts, acceding to the demands from specific industries and in conformity with the government’s intent to boost consumption.
Source: Financial Express