54th GST Council Meet Live, Tax Announcements Live Updates: The 54th GST Council Meeting, chaired by Union Finance Minister Nirmala Sitharaman has ended. Finance Minister in her address to the press after the meeting says that decision on insurance related matters has been deferred. There is a possibility to expect a decision on GST rates in November meeting. The Council also discussed the compensation cess issue.
GST Council Meeting 2024 Live Updates: Nirmala Sitharaman on Insurance Tax, Online Gaming revenues, Health Insurance and Rate Rationalisation Live
The GST Council is also expected to exempt foreign airline companies from paying taxes on certain services imported from their overseas Indian branches or related entities, in case of no payment involved. This could provide relief to foreign airline companies that have received tax notices from the Directorate General of GST Intelligence (DGGI).
Shivashish Karnani, Head of GST at Dewan PN Chopra & Co, said, “There is a lot of ambiguity on the transactions between branches of Indian companies and their foreign branches/head offices. Challenges arose when the tax department issued GST notices for crores of rupees to taxpayers such as Infosys, various foreign airlines including British Airways, Lufthansa, and Emirates, primarily related to unpaid GST on the import of services by Indian branches from their head offices/branches outside India. Therefore, clarification on these matters is expected from the upcoming GST Council meeting.”
The GST Council is expected to be apprised about the drive against fake registration and action taken against defaulters. The total amount of suspected GST evasion would also be presented before the Council. The first drive against fake registration was initiated between May 16, 2023 to July 15, 2023 and 1,791 entities (11,392 pertaining to state tax jurisdiction and 10,399 pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent. The drive from August 16, 2024, to October 15, 2024 is now detecting suspicious/fake GSTINs. The report from this will be presented before the Council.
Asish Philip, Partner, Lakshmikumaran and Sridharan, said, “On implementation of 28% GST on deposits for online gaming, it was promised to review impact on stakeholders after 6 months of implementation. The industry expects the 54th GST council meeting to review the impact of high rates of taxation levied on the sector and growing trends of grey market players. While the matter remains sub-judice before the Supreme Court, the industry expects the GST Council to provide some direction in terms of newly introduced Section 11A for Show cause notices (SCN’s) issued for past period. Additionally, the industry players are also looking forward for some clarifications on issues such as valuation and treatment of discounts, promotions and incentives under new deposit-based regime in line with clarification provided for TDS deduction under online gaming.”
According to media reports, the GST Council is likely to consider provisions to give relief to Infosys. The government is likely to retract its demand from Infosys for payment of $4 billion in back taxes. Earlier, authorities had ordered Infosys to pay the additional amount, arguing that its overseas offices should pay GST dating back to 2017. Further, the Council is also expected to address issues affecting companies like Amazon, Google, and Meta.
The GST Council may review the exemption granted to payment aggregator platforms for transactions below Rs 2,000 through UPI, debit/credit cards and other payment methods and consider levying an 18 per cent GST on them.
According to sources, the GST Fitment Panel is of the view that payment aggregators serve as intermediaries for transactions and therefore should not be classified as banks.
Shivashish Karnani, Head of GST at Dewan P.N. Chopra & Co, said, “Despite being the world’s most populous country, India ranks among the lowest in terms of life and medical insurance coverage per capita. Also, the percentage of the Indian population with insurance coverage is substantially lower than that of many developed nations like the United Kingdom and the United States. The current GST rate on life and medical insurance premiums is 18% which further accelerate the affordability issue. Consequently, one of the key expectations from the 54th GST Council meeting is a reduction in tax rates or, ideally, the complete exemption of GST on life and health insurance premiums.
While a complete exemption of GST on insurance premiums might lead to challenges for the insurance industry due to potential ITC reversals under Rules 42 and 43 of the Central Goods and Services Tax Rules, 2017, the industry is hopeful that the 54th GST Council meeting will result in a significant reduction of the GST rate from 18% to a lower rate such as 5% or even 0.1%. This reduction would alleviate the tax burden on both insurers and policyholders.”
The 54th GST Council will discuss key issues across various industries ranging from rate rationalisation, reduction in tax slabs, removing inverted duty structure, besides lowering the rates for online gaming, insurance and other sectors.
Good Morning. Welcome to the live blog on the 54th GST Council Meeting, wherein we, at FinancialExpress.com, will bring to you all the updates and announcements made by the GST Council chaired by Finance Minister Nirmala Sitharaman. Stay tuned.