Summary of the Thirtieth GST Council Meeting's Resolutions

The 30th Goods and Services Tax (GST) Council meeting, which convened on September 28, 2018, primarily concentrated on the administrative advancements within the GST framework. Discussions also addressed the necessity of implementing a cess in urgent circumstances. India's Finance Minister, Arun Jaitley, presided over this meeting, conducted via video conference. Latest updates on subsequent GST Council meetings include:

• The 47th GST Council meeting, held on June 28-29, 2022, in Chandigarh, was chaired by Union FM Nirmala Sitharaman. Recommendations focused on revising rates for revenue enhancement and correcting inverted tax structures, while also streamlining the GST exemption list. Additionally, compliance relief was extended to e-commerce suppliers and taxpayers under the composition scheme.
• The 46th GST Council meeting, held on December 31, 2021, in New Delhi, led by Union FM Nirmala Sitharaman, decided to postpone the GST rate increase to 12% for textile products.
• The 45th GST Council meeting on September 17, 2021, addressed key issues such as extending tax concessions for COVID-19 essential goods, discussions on GST compensation for states, and correcting inverted tax structures.
• The 43rd GST Council meeting, which took place on May 28, 2021, approved the reintroduction of the GST amnesty scheme and rationalized late fees for all taxpayers, with a particular focus on small taxpayers. Furthermore, IGST was exempted on the import of COVID treatment equipment and relief materials until August 31, 2021.

Formation of GoM

A seven-member Group of Ministers (GoM) was established with a mandate to investigate specific areas and submit a report of recommendations to the GST Council by October 31, 2018. The key issues for the GoM included:

• Levying a GST cess for Kerala flood victims: The Kerala Government had proposed a 10% cess to facilitate the recovery of losses incurred due to floods. The GoM was tasked with making a decision regarding the implementation of this proposed cess and determining who would bear its cost.
• Temporary GST tax for states in emergencies: The GoM was also required to analyze the long-term implications of imposing a temporary state cess on commodities. This cess would be applicable for a limited period, subject to official notification. An additional 1% tax on specific items was also part of the deliberations during the meeting.
• Other matters for GoM consideration: The committee was set to examine whether any temporary tax should be imposed solely in the affected state or applied nationwide. It would also propose and determine the categories of goods that would be subject to this tax. Furthermore, the GoM would assess if the National Disaster Response Fund (NDRF) and State Disaster Response Fund (SDRF) mechanisms were adequate to manage calamities, and establish the legal grounds for imposing a calamity tax under GST.

Discussion on Revenue Positions of All States

Several North-Eastern states reported GST collections that surpassed expected targets. A panel of analysts was scheduled to conduct research on GST collections across all states and propose strategies to bridge the existing gap between current revenues and targeted revenues. Data on GST revenue collection indicated a 16% shortfall in the first year of its implementation, which subsequently decreased to 13% between April and August 2018. Finance Minister Arun Jaitley anticipated that this deficit would naturally neutralize within five years of GST's rollout. Based on the analysis, future rate reductions for goods and services would be contingent on increasing revenue collections across all states in the upcoming months. Official press releases from the Central Board of Indirect Taxes and Customs (CBIC) were still pending.

Expectations from the 30th GST Council Meeting

Key expectations and discussions anticipated from the council meeting included:

• Rationalizing GST rates on cruise tourism: It was anticipated that the council would consider rationalizing GST rates for cruise tourism services or potentially exempting them entirely. Currently, cruise tourism services are subject to an 18% tax rate.
• Simplifying and automating GSTR-9C: While the reconciliation statement, filed with the annual return GSTR -9, had been officially notified, the council was expected to discuss its simplification and further automation. This initiative aimed to reduce both compliance costs and time burdens for taxpayers.
• MSME Compliances: Following the 29th GST Council meeting, a committee was established to address MSME compliances and compile a report. The 30th meeting was expected to discuss the committee's findings and recommendations concerning MSMEs.
• Flood-relief cess for Kerala: The council was anticipated to deliberate on the Kerala government's request for a cess to accumulate resources for flood recovery efforts. Although imposing additional taxes on affected individuals might be perceived as unfair, the GST council had to reach a decision on this matter.
• GST on Aviation Turbine Fuel (ATF): The Finance Minister proposed bringing ATF under the GST regime. Rising jet fuel prices, coupled with decreasing air ticket costs, had placed airlines on the verge of financial crisis. Integrating ATF into GST would primarily impact states that possess a greater number of airports.