GST Council passes changes in tax rates, states to issue e-way bill

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GST Council passes changes in tax rates, states to issue e-way bill

The GST Council passed changes in tax rates on some goods and services, while the states were allowed to issue an e-way bill for intra-state movement of gold and precious stones, officials said.

The Council, chaired by Finance Minister Nirmala Sitharaman and comprising state counterparts, cleared a number of compliance procedures for GST-registered businesses along with a GoM report on high-risk tax payers to check evasion.

The discussion on the issue of extension of compensation to states beyond June 2022 and the imposition of 28 per cent GST on online gaming and horse racing will take place on Wednesday.

The opposition ruled states have been pressing for either an extension of the GST compensation regime or increasing the state's share in revenue from the current 50 per cent.

In the meeting on Tuesday, the Council accepted the interim report of the group of state finance ministers, headed by Karnataka Chief Minister Basavaraj S Bommai, on rate rationalisation, including correction of inverted duty structure and removing tax exemption on some items, to simplify the rate structure.

The GoM had suggested a withdrawal of the GST exemption on a host of services, including hotel accommodation of less than 1,000 per day, and replacing it with a 12 per cent tax.

It also recommended a levy of 5 per cent GST on room rent, excluding ICU charges for hospitalised patients whose hospital room charges are above Rs 5,000 per day.

It wanted all post office services other than postcards and inland letters, book post and envelopes weighing less than 10 gm to be taxed. The GoM recommends that cheques, loose or in book form, should be taxed at 18 per cent.

The GoM favoured the reversal of the exemption on renting residential dwellings by businesses for residential use.

The Council recommended that states can decide on the threshold over which the electronic bill will be made mandatory with regard to the e-way bill on intra-state movement of gold, jewellery and precious stones to check evasion.

A panel of state ministers recommended the threshold be raised to Rs 2 lakh and above.

A panel of state finance ministers suggested that verification after registration for high-risk taxpayers under GST, as well as using verification of electricity bill details and bank accounts to identify such taxpayers, according to a report by a panel of state finance ministers.