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The 54th meeting of the GST Council demonstrated its responsiveness to industry needs by addressing pain points and establishing Groups of Ministers (GoMs) to tackle long-term policy issues. The Council's actions reflect a commitment to cooperative federalism and effective tax policy administration. Notable achievements include the rationalization of GST rates, addressing unintended levies, and providing relief to sectors like film distribution and foreign airlines.
The establishment of two GoMs – one focusing on life and health insurance and the other on compensation cess – signifies the Council's proactive approach to addressing critical issues. These GoMs are mandated to present their findings by October 24th, allowing the Council to engage in thorough deliberations and reach consensus. Additionally, the Council's efforts to streamline the metal industry by addressing the reverse charge mechanism for metal scrap are noteworthy, although the fine print regarding potential cascading impacts requires further scrutiny.
While the Council's accomplishments are commendable, the article emphasizes the need for a long-term vision for GST. Two key areas requiring immediate attention are the re-evaluation of input tax credit (ITC) admissibility and the multiplicity of audits and investigations on large corporations. The article suggests a comprehensive review of Section 17(5) of the GST law, which restricts credits in certain cases, and calls for a streamlined audit process with centralized coordination and possible rotation between central and state agencies.
The article concludes by highlighting the government's dedication to creating a favorable business environment in India. The Council's proactive approach and the upcoming findings of the GoMs are expected to contribute to a more efficient and streamlined tax system, ultimately enhancing the ease of doing business in India. The article emphasizes that the Council's current achievements are a testament to their commitment, but a long-term vision is crucial for the continued success of GST.
Source: Sitharaman-led GST Council has a key task now to develop a long-term vision for tax