For the first time since March 2020 when the Covid-19 pandemic hit India, the GST Council meeting on Friday in Lucknow will have all the members present physically. Finance Minister Nirmala Sitharaman will chair the meeting, and it will be attended by representatives of 28 states and three Union Territories to discuss items that may both reduce and increase the burden on consumers
The revision in rates of more than 50 goods and services along with a discussion on bringing petroleum products like petrol, diesel and aviation fuel under the ambit of GST on the agenda of the council's meeting.
But the meeting is expected to dedicate a lot of time to the issue of compensation to states for revenue losses due to the GST regime.
The GST Act that came into effect from July 1, 2017 provided an assurance to states that if the growth in revenue post GST was less than 14 per cent, they will get compensated for the shortfall for a period of 5 years through special cess on certain category of goods such as automobiles and tobacco products.
Facing a shortfall, states have pressed for extending the compensation regime beyond June 2022 deadline. Their argument is that the pandemic has caused a major setback in revenue and their burden has gone up.
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