GST Council Meeting: Goods and services taxes will be changed? What to anticipate from this day? Finance Minister Nirmala Sitharaman will preside over the 53rd Goods and Services Tax (GST) Council Meeting on Saturday in New Delhi.
The agenda of the meeting includes a number of significant issues impacting different industries. The precise agenda of the meeting is still unknown, but it is anticipated that the Council will address important matters that have been on hold for some months.
Following the 52nd meeting on October 7, 2023, where a 28% levy on internet gaming, casinos, and horse racing was agreed, this is the first GST Council meeting in eight months. The April 2024 review of this levy was originally planned, however it was pushed back to the March meeting.
Tax review for online gaming is probably
A major goal for today’s meeting is to evaluate the 28% GST that online gaming operators are required to pay on the full face value of bets.
The GST laws were amended by the Council last year to make internet gaming, casinos, and horse racing taxable actionable claims.
A review was originally scheduled for April 2024, but it hasn’t happened yet. The online gambling business has challenged in court an estimated Rs 2 lakh crore tax bill that it currently faces. Their appeals are anticipated to be heard by the Supreme Court in July.
In response to the Council’s ruling, more than 70 online gaming companies have been served show cause letters for allegedly evading paying over Rs 1.12 lakh crore in taxes in the fiscal years 2022–2023 and 2023–2024.
According to experts, the GST Council can either correct the ruling by doing away with the 28% GST’s retroactive implementation or forego any revisions while the matter is still being litigated.
The partner at Dhruva Advisors, Ranjeet Mahtani, proposed that the GST Council tackle a number of issues today, such as rationalizing and redesigning the rate structure.
He noted that answers on the recently implemented GST on business guarantees may also be obtained from the Council.
Potential GST cut on fertilizers and chemicals
The Standing Committee on Chemicals and Fertilizers’ February suggestions to lower the GST on nutrients and raw materials in order to help farmers and fertiliser manufacturing enterprises may also be discussed by the GST Council.
Currently, the GST rate on fertilisers is 5%, whereas the GST rate on raw ingredients such as ammonia and sulfuric acid is 18%.
Prior attempts to lower these rates were discussed at the 45th and 47th GST Council sessions in September 2021 and June 2022, respectively, but no recommendations for modifications were made.
Fuel subject to GST?
Proposals to incorporate gasoline into the GST framework to create uniform prices for necessary energy resources are still in the works.
Some states, however, are against this concept because they fear that fuel taxes could result in a loss of revenue.
Substantial cost savings could result from incorporating gasoline into the 28 percent top tax rate GST system.
Right now, state-level value-added taxes (VAT) and federal excise levies apply to petroleum items, creating pricing differences across states and driving up retail costs.
Additional conversations that may be had
Even after repaying debts taken out on behalf of states during the Covid-19 period, the government may get an unanticipated windfall of Rs 70,000 crore through a strong GST compensation cess, according to The Economic Times.
The extra levy is levied on products classified as “sin goods,” such as fizzy drinks, pan masala, cigarettes, and cars, which are already subject to the highest 28% GST rate.
According to a senior official cited in an ET report, “going by the collection trend we would be left with about Rs 65,000-70,000 crore and would be able to make a prepayment of all the loans much ahead of the March 2026 deadline.”
Although the Centre has not yet made a decision regarding the usage of this additional cess cash, officials anticipate that the topic will come up during the GST Council meeting on Saturday when the rate rationalization discussion starts.
According to the article, the Group of Ministers (GoM) on rate rationalization may be given a deadline by the GST council to produce a report.
The GoM is now led by Samrat Chaudhary, the deputy chief minister of Bihar, and has reconvened thrice in the past year.
Furthermore, the council is probably going to review any changes made to the GST law in relation to the choices made at the October preceding meeting.
This includes granting states the authority to continue charging VAT on Extra Neutral Alcohol (ENA) used for human consumption; ENA utilized for industrial purposes will still be subject to an 18% GST tax.
