The road ahead for GST as it enters its fifth year

As the historic indirect tax reform reaches its fifth anniversary, the Goods and Services Tax (GST) Council to convene for two days started on Tuesday. The meeting is critical because it comes at a time when both the federal and state governments are facing significant fiscal issues. Mint investigates the Council’s activities:

What is the context for the meeting?

The 47th GST Council meeting will take place as the economy continues to recover from the pandemic and tax officials intend to increase the effectiveness of the GST infrastructure. Although negotiations within the Council for a significant revision in GST rates were sparked by the stretched budgetary position of the central and state governments, the change is currently being postponed because of a spike in inflation that has hurt household budgets. By the end of this month, the GST will have been in existence for five years, and states that have been receiving compensation from the federal government for revenue losses will no longer receive it.