GST Council meeting on October 7: What's on agenda
What's the story
The 52nd meeting of the Goods and Services Tax (GST) Council is scheduled for October 7, 2023, in New Delhi. Although the specific agenda remains under wraps, insider insights and media reports hint that the council may tackle technical issues like clarifying numerous demand notices and possibly considering a rate exemption for millet-based foods. An anonymous official revealed to BQ Prime that the fitment committee report has maintained the status quo on many industry-related matters.
Details
Review of online gaming taxation progress
One topic likely to be discussed during the GST Council meeting is the progress made by states in implementing tax changes for online gaming in their respective State GST laws. The Centre imposed a 28% tax on online gaming, casinos, and horse racing starting from October 1. Several gaming companies have received tax-demand notices for periods before this date and they are being disputed by the industry. The council will discuss whether these tax-demand notices should be ratified.
What Next?
Possible exemption and reduction in GST rates
The GST Council is expected to consider an exemption for millets sold in powdered form. They may also discuss reducing GST rates for molasses from 28% to 5%, CNBC-TV18 reported. Furthermore, the CNBC-TV18 report stated that the council is anticipated to provide clarity on the taxation of Extra Neutral Alcohol (ENA) for both the central government and industry, with reports suggesting that ENA could be exempted from GST.
Insights
Proposed GST rate adjustments
Various sectors have submitted representations seeking adjustments in GST rates. These include proposals concerning electric vehicle (EV) batteries, zari thread, and compensation cess on cigarettes, the official told BQ Prime. The fitment committee, consisting of revenue officials from the government and states, has scrutinized these requests, though not all have garnered approval. The fitment committee is a group of revenue officials from the government and states who examine representations regarding the rates of goods and services.
Insights
Expanding judicial member eligibility
The 52nd GST Council meeting is also expected to consider a recommendation to broaden the pool of judicial members on state appellate tribunals. This would entail permitting practicing advocates specialized in specific tax areas to qualify for such roles.
Insights
Taxation of bank guarantees and facilitating reforms
The GST Council is expected to discuss whether bank guarantees provided by senior company executives, such as directors or promoters, to subsidiaries should be treated as a service supply. According to an Economic Times report, the valuation method for taxation could involve either the remuneration received by the director or 1% of the total guaranteed amount. Additionally, the council is likely to consider facilitating reforms, including extending deadlines for filing returns and simplifying the appeals process.