25th June 2024 (9 Topics)
1
Jun
3
Jun
4
Jun
5
Jun
6
Jun
7
Jun
8
Jun
10
Jun
11
Jun
12
Jun
13
Jun
14
Jun
15
Jun
17
Jun
18
Jun
19
Jun
20
Jun
21
Jun
22
Jun
24
Jun
25
Jun
26
Jun
27
Jun
28
Jun
29
Jun
A Tax Less Taxing
You must be logged in to get greater insights. click here to login
Context
The GST Council recently convened for the first time under the new Union government, focusing on adjusting tax rates and implementing measures to reduce litigation and enhance taxpayer compliance. While steps have been taken in these areas, several other critical issues demand immediate attention.
Rate Rationalisation and Fiscal Stability:
- Deliberations on Rate Rationalisation: The GST Council has been deliberating on rate rationalisation since the formation of a Group of Ministers (GoM) in September 2021.
- Balancing Act for Revenue Neutrality: Discussions include merging tax slabs while maintaining revenue neutrality, a complex balance crucial for fiscal stability.
- Studies on Revenue-Neutral Rates: Studies show varying perspectives on revenue-neutral rates, necessitating careful consideration to avoid fiscal imbalances.
Challenges of Including Petroleum Products:
- Contentious Inclusion Debate: Bringing petroleum products under GST remains contentious due to their significant revenue contribution to both the Centre and states.
- Complex Taxation Structures: Current taxation structures by states add complexity, requiring strategic coordination and agreement between all stakeholders.
- Importance of Coordination: Addressing this issue is vital for expanding GST coverage while ensuring sustainable revenue streams for all levels of governance.
Future of Compensation Cess and Financial Implications:
- Extension and Repayment: Originally intended to end in June 2022, the compensation cess was extended to March 2026 to aid states in revenue recovery post-pandemic.
- Discontinuation Consideration: Discussions now focus on the potential discontinuation of the cess post-2026, considering fiscal implications and state concerns.
- Need for Consensus-Building: Resolving these issues will require extensive deliberation and consensus-building among all stakeholders to ensure equitable outcomes.
Mains Question:
Q. Discuss the challenges faced by the GST Council in India and the measures needed to address them effectively. How can the Council balance the interests of the Centre and states while reforming the GST framework?
More Articles
Courses
Study
Notes
Home
Resources
More
