Even as the crisis-hit sectors eye for a rate cut, the GST Council is unlikely to oblige owing to a fear the move may impact the already slowing revenues. The fitment committee, consisting of officials from states and the Centre, recommended against the GST rate cut on several products ranging from automobiles to biscuits so as to safeguard the existing revenue position, The Indian Express reported citing unidentified sources. The GST Council is scheduled to hold its 37th meeting in Goa on September 20, 2019. However, the committee supported the decision to cut GST rates 28 per cent from 18 per cent for hotels with a tariff of Rs 7,500 and above, the report added. The Council is expected to provide some relief for the annual GST return filing to smaller taxpayers with annual turnover up to Rs 2 crore, the report also said.
The fitment committee has also recommended against ant reduction in GST rate on biscuits. Amid the ongoing slowdown in the economy, the revenue collections too have taken a hit with the GST collection in the month of August accounting for Rs 98,902 crore, the lowest in the FY20 so far. The fitment committee has projected the loss in revenue loss of Rs 50,000 crore.
The states have already expressed concerns over any cut in the GST rates on account of likely revenue losses. Kerala Finance Minister Thomas Isaac had already said cutting the tax rate would only make the tax system unfair. Prior to that he had said that reducing GST rate on auto would result in revenue loss for states. The central government may afford to lose revenue, but states can’t do it, he had told news agency IANS in an interview.