The 49th GST Council Meeting held on June 12, 2021, failed to address some of the critical issues plaguing the GST regime. While some decisions were taken, the overall outcome fell short of expectations. The reluctance of the Council to undertake significant reforms is a cause for concern.
One of the most pressing issues that the GST Council needs to address is the compensation cess to states. The compensation cess, which was introduced in 2017, was supposed to compensate the states for any revenue loss arising from the implementation of GST. However, due to the pandemic and the resultant economic slowdown, the compensation cess collections have fallen short, leading to a shortfall in the compensation fund. The Council has been postponing the issue of finding a permanent solution to this problem, and the 49th meeting was no exception.
Another issue that the Council has failed to address is the high GST rates on essential items such as medical supplies and equipment, which have become critical during the pandemic. The high GST rates on these items have made them unaffordable for many, and the Council’s failure to reduce these rates is disappointing.
Moreover, the Council has not taken any steps to simplify the GST regime, which continues to be complex and cumbersome. The frequent changes in the GST rates and procedures have created confusion among taxpayers, and the Council’s reluctance to undertake reforms in this regard is worrying.
In conclusion, the GST Council’s 49th meeting failed to address some of the critical issues plaguing the GST regime. The reluctance of the Council to undertake significant reforms is a cause for concern, and it needs to take urgent steps to address the issues of compensation cess, high GST rates on essential items, and simplify the GST regime. Only then can GST achieve its intended goal of creating a simple, transparent, and efficient tax regime?
