GST Council Meeting News Updates Highlights: The Goods and Services Tax (GST) Council is Meeting today (June 22). Union Finance Minister Nirmala Sitharaman is presiding over the meeting. Earlier, the GST Council, just a day after Nirmala Sitharaman formally assumed charge as Union Minister of Finance and Corporate Affairs, announced the date of the 53rd GST Council meet – June 22.
The previous GST Council meeting was held on October 7, 2023. It was presided over by Finance Minister Sitharaman and attended by Finance MoS Pankaj Chaudhary, the Revenue Secretary, Chairman CBIC, Member CM, Member GST, Member TP, and senior officers from the Union Government and States. In its October meeting, the GST Council decided to impose a 28 per cent levy on online gaming, casinos, and horse racing. Later in the March GST meeting, the council postponed the review of the 28 per cent levy imposed on the proceeds from online gaming.
“One of the key strengths of the GST law for related party transactions has been the flexibility in valuation methods. As long as the recipient claims full input tax credit (ITC), companies can choose any valuation method that suits their needs. This provision has significantly eased compliance burdens across industries, both for domestic transactions and imports of goods.
However, an ambiguity persists regarding the applicability of this flexible valuation method to import of services. Uncertainty exists around whether companies can leverage this benefit when importing services from related parties.
To ensure consistency and streamline compliance for businesses, it is recommended that the GST Council address this ambiguity in its upcoming meeting. Specifically, the Council should clarify that the existing dispensation for related party transactions also applies to the import of services. This will eliminate confusion and allow businesses to utilize the full potential of the flexible valuation framework under GST.”
According to sources, the government is likely to consider a review of the 28% GST levy on the full face value of bets by online gaming companies. In July and August last year, the Council approved amendments to the GST laws to include online gaming, casinos, and horse racing as taxable actionable claims. During that time, it was mentioned that a review of this implementation would be conducted after six months (April 2024), but that didn’t take place.
Currently, the online gaming industry is facing around Rs 2 trillion tax liability, which they have challenged in court. The Supreme Court is likely to hear their petitions in July.
Experts say that the GST Council faces two options: first, to refrain from taking corrective measures while the matter is sub-judice and await court directions; second, to immediately correct the disputed decision by removing the retrospective application of the 28% GST.
The GST Council will meet today and will discuss proposals to bring natural gas and aviation turbine fuel (ATF) under the ambit of the GST, and a review of the way the tax on consumption is applied on online gaming, casinos and horse racing. Industry is looking at discussions during the GST Council meeting on the revival of a plan to restructure the complex multiple-rate tax structure, with GST revenue having already risen significantly.
The 52nd GST Council meeting was held on October 7, 2023, and was presided over by Union Finance Minister Nirmala Sitharaman. The GST Council had, during the meeting, announced the imposition of 28% levy on online gaming, casinos, and horse racing. Later in the March GST meeting, the council had postponed the review of the levy imposed on the proceeds from online gaming.
The Finance Minister will preside over the 53rd GST Council meeting on June 22, 2024.
The GST council uses a consensus-based decision-making process when making decisions during meetings. Encouraging the spirit of cooperative federalism, the GST council makes decisions with a majority of at least three-fourths of the weighted votes of the members present and voting. One-third of the total votes cast go to the Center, and two-thirds of the total votes go to the States.
The GST system is divided into two parts. The Central Government levies the Central GST (CGST) and State governments levies the State GST (SGST) concurrently. On imports and interstate supplies, there is also an additional tax known as the Integrated GST (IGST), which is distributed to the destination state but collected by the Central Government.
GST laws were implemented on July 1, 2017, replacing a complex web of Central and State taxes. Under the Indian GST, goods and services are categorized into different tax slabs, including 5%, 12%, 18%, and 28%. Some essential commodities are exempted from GST, Gold, and diamond job work attracts low tax rates. A compensation cess is being levied on demerit goods and certain luxury items.
The GST Council Meeting will start today. The government had announced the date of the meeting as June 22, just a day after Nirmala Sitharaman formally assumed charge as Union Minister of Finance and Corporate Affairs. “The 53rd meeting of the GST Council will be held on 22nd June, 2024 at New Delhi,” the official handle of GST Council on X, had stated.