It may discuss extending the compensation cess for states beyond 2022
The Goods and Services Tax Council meeting on Friday, the first physical meeting in more than 20 months, will deliberate on levying the Covid cess on pharmaceuticals and the power sector for intra-state supplies in Sikkim besides extending the states compensation period beyond 2022.
The meeting, being held in Lucknow, may take up notifying a common comprehensive e-portal gst.gov.in for registration, paying tax, and filing returns. Chaired by Union Finance Minister Nirmala Sitharaman, the 45th Council meeting will be the first one taking place outside New Delhi in two years.
The Group of Ministers (GoM), led by Karnataka Chief Minister Basavaraj Bommai, has backed Sikkim’s proposal for a 1 per cent cess on intra-state supplies of pharmaceuticals for two years. It has endorsed a special aid of Rs 300 crore per annum till 2023 for Sikkim by the Centre to overcome Covid-related losses.
However, with electricity being outside the GST purview, the GoM has recommended the state independently explore the proposal of Rs 0.1 (10 paise) per unit of electricity consumption or sale.
It may discuss extending the compensation cess for states beyond 2022. Most states are likely to pitch for an extension by another five years, amid several fiscal constraints. While the Centre may agree to extend the compensation period, it will press for lower assumed revenue growth as against the 14 per cent at the moment, arguing that it may not be sustainable.
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