Government can also consider these discounts
The report further noted that the government should immediately focus on some key issues, including ITC’s eligibility on depleted stocks, tax liability of intermediary services and rebate schemes. The report said that the government should consider issuing clear guidelines on these issues and also suggested a lump sum dispute settlement scheme under GST.
PwC in its report titled ‘Reimaging GST at 3’ said that cash assistance schemes are the need of the hour. According to the report, “Like various developed countries, the government has announced time-bound budgetary support schemes. Despite these steps, there are several areas that remain to be covered.
According to the sources, the GST Council, headed by the Union Finance Minister Nirmala Sitharaman, is going to discuss the GST Council’s compensation for the third consecutive time for reduction in GST revenue. In fact, some non-BJP ruled states have suggested the formation of a Ministerial Committee for consensus in this matter. However, BJP-ruled states have given their consent to the compensation option of the Center.
Sources said that the unilateral agenda of the GST Council meeting is to find a way forward on the issue of compensation. The council had decided in a meeting held last week that cess would be levied on luxury or harmful products like cars, tobacco etc. even after June 2022. However, there was no consensus on the issue of compensation in the said meeting.
It is worth mentioning that GST compensation revenue is estimated to decrease by Rs 2.35 lakh crore in the current financial year. The central government gave the states two options in the GST Council meeting held in August. Under the first option, it is proposed to provide special facilities for a loan of Rs 97 thousand crore from the Reserve Bank and under the second option it is proposed to raise the entire Rs 2.35 lakh crore from the market. However, after the demand of some states, the special lending arrangement under the first option has been increased from Rs 97 thousand crore to Rs 1.10 lakh crore. Most states have already agreed to the first proposal of the Center.
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