21st GST Council meeting begins in Hyderabad

The high-powered Goods and Services Tax Council got underway here with states demanding review of tax rates on some items as also expressing concerns on hiccups encountered by the GSTN portal.

The Council will decide on the crucial issue of increase in cess rate on motor vehicles. Industry has demanded that only part of total cess increase of 10% be effected after festival season or a new category of lower rate be created for midsized cars and full rate be applied only on luxury ones and SUVs. The Council had at its last meeting approved a proposal for change in compensation law to raise it to 25% from 15% now. Cess is levied in addition to 28% GST.

West Bengal finance minister Amit Mitra demanded a white paper on the functioning of GSTN.

Mitra said breakdown or technical glitches on GSTN portal shows GST was implemented in a haste and council will review it.

Jammu and Kashmir finance minister Haseeb Drabu, however, played down the issue.

"Issues faced on GSTN are operational and technical...These issues on portal would have happened even if GST was implemented a year later," Drabu said adding that a group of ministers should be formed to look into the issues.

Telangana finance minister E Rajender said the state had sought reduction in GST rate for work contracts to 5%.

Rajasthan Industry minister Rajpal Shekhawat said the council will review tax rate on Khadi and handicraft items.