GST Council may propose amendment to nullify retrospective tax demands
What's the story
The Goods and Services Tax (GST) Council is contemplating an amendment to the Central Goods and Services Tax (CGST) Act, 2017. This potential change, proposed by the law committee, aims to nullify retrospective tax demands, where lower taxes were paid due to interpretation issues or law ambiguity. As per Economic Times, the proposed amendment would bring a new Section 11A to the CGST Act, empowering the Centre to abstain from recovering GST that was under-levied or not levied at all.
Impact
Relief for online gaming industry
The GST Council is set to discuss this proposal on June 22. If approved, it would enable authorities to dismiss tax demands that were raised retrospectively, offering a major relief to the online gaming industry. However, the proposed amendment does not address overpaid taxes, and companies that have paid excess GST due to these practices, will not be eligible for refunds.
Tax evasion
E-gaming sector faced hefty tax evasion notices
In the financial year (FY) 2023-24, the Directorate General of Goods and Services Tax Intelligence (DGGI) uncovered 6,323 cases of tax evasion of nearly ₹2 lakh crore. The online gaming sector bagged the highest number of tax evasion notices, totaling over ₹1 lakh crore. This proposed legislative change is seen as an important step in providing clarity and relief for businesses, navigating through the complexities of the GST regime.