GST Council meet inconclusive, talks to be held again on February 24https://indianexpress.com/article/business/economy/gst-council-meet-inconclusive-talks-to-be-held-again-on-february-24-5593681/

GST Council meet inconclusive, talks to be held again on February 24

Ahead of the Council meeting, close to half a dozen Opposition-ruled states including Kerala, Delhi and Puducherry had sent letter to Jaitley on Tuesday asking for deferment of the meeting.

goods and services tax, GST, GST Council meeting, GST slabs, GST collection, arun jaitley, business news, indian express
Finance Minister Arun Jaitley, Minister of State for Finance Shiv Pratap Shukla, Revenue Secretary Ajay Bhushan Pandey at the GST Council meeting. (PTI)

The 33rd meeting of goods and services tax (GST) Council on Wednesday remained inconclusive and was adjourned to meet again on Sunday as some states asked for detailed discussion in the form of a physical meeting. The meeting was held through videoconferencing, wherein some states cited possible revenue loss, valuation of land and sourcing norms for real estate developers as the contentious issues in lowering the GST rate on residential housing.

The Council also decided to extend the deadline for filing the summary GSTR-3B returns (for January) by two days due to high volumes of returns being filed on the last day and some technical glitches. For Jammu & Kashmir due to disturbance in some areas, the deadline was extended to February 28. Finance Minister Arun Jaitley, who heads the GST Council, said he adjourned the meeting keeping the idea of consensus in mind. The proposal to have a uniform rate on lottery was not discussed and both the issues related to lottery and real estate will be discussed on Sunday.

“The discussion which remained incomplete today through video conferencing, few ministers expressed their opinion and the rest will express their opinion and we will try and take a decision on this issue on Sunday. So the meeting stands adjourned as of day for Sunday … I have always had an approach of moving as per consensus and since some of the states wanted a meeting where members are physically present, keeping the idea of consensus in mind I adjourned the meeting to Sunday so that a physical meeting can be held and the same issue will be discussed on Sunday,” Jaitley told reporters after the meeting.

Ahead of the Council meeting, close to half a dozen Opposition-ruled states including Kerala, Delhi and Puducherry had sent letter to Jaitley on Tuesday asking for deferment of the meeting.

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Sources said states expressed concerns of potential leakages and evasion if the Council allows lower GST on real estate without input tax credit (ITC). The proposed sourcing norm of 80 per cent from registered dealers in place of removal of ITC may not be effective as it can still be misused, they said.

Kerala’s Finance Minister Thomas Isaac said the value chain may break in realty sector by bringing in composition scheme, while the proposal to lower tax rate on lottery may only benefit lottery mafia. “No one is opposed to the need to boost real estate sector but there were differences about details as to how do you value land. The proposed 80 per cent sourcing from registered dealers could be used to purchase capital goods, which could reduce it in effect to 60-70 per cent. This may dilute the basis of GST. Such serious issues need to be discussed threadbare,” Isaac told The Indian Express.

Punjab’s Finance Minister Manpreet Singh Badal also echoed similar views, saying that land is a state subject and thus, there should be clarity about taxation decisions related to it. “Law should be clear and there should be no place for ambiguities. Land is a state subject and proper clarity is needed on tax related to it. There are rough edges which need to be removed,” Singh told The Indian Express.

A group of ministers (GoM) on issues related to lottery has favoured a uniform tax rate of either 18 per cent or 28 per cent from the current rate of 12 per cent for state-run lottery and 28 per cent for state-authorised lottery. Separately, another GoM, under Gujarat Deputy Chief Minister Nitin Patel, favoured lowering the GST rate on under-construction residential properties to 5 per cent (without input tax credit) from current effective rate of 12 per cent with input tax credit (after one-third abatement of land) and for affordable housing to 3 per cent from the current rate of 8 per cent.