50th GST Council Meeting
The 50th GST Council meeting occurred on July 11, 2023, at Vigyan Bhawan in New Delhi. It marked a significant milestone as it was the 50th meeting since the inception of GST. The meeting was led by Union FM Nirmala Sitharaman and included ministers representing states and Union Territories. To commemorate the occasion, a short video film titled ‘GST Council- 50 steps towards a journey’ was released by the Chairperson in the presence of Council members. The postal department also released a special cover and customized ‘My Stamp’ to honour the event.
The meeting covered three key matters. Firstly, rate decisions were made on goods and services, along with clarifications and rate regularizations. Secondly, recommendations from various Groups of Ministers (GoMs) were discussed. Lastly, the meeting addressed the payment of compensation cess dues to states based on AG-certified claims.
Some key highlights from the meeting include:
- Recommendations on GST for goods:
- Reduction of GST rates on various goods, such as uncooked/unfried snack pellets, fish soluble paste, imitation zari threads/yarn, and LD slag.
- IGST exemption on certain imported medicines and Food for Special Medical Purposes used to treat rare diseases.
- Clarification that the supply of raw cotton by agriculturists to cooperatives is taxable under the reverse charge mechanism.
- Regularization of past issues related to raw cotton, trauma and arthroplasty implants, desiccated coconut, plates and cups made of areca leaves, and biomass briquettes.
- Inclusion of all utility vehicles meeting specific parameters in the compensation cess notification.
- Notifying the ad valorem rate applicable on pan masala, tobacco products, etc., for the levy of compensation cess.
- Recommendations on GST for services:
- GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited.
- Simplification for Goods Transport Agencies (GTAs) in filing GST under forward charge every year.
- Clarification that services a company director supplies to the company in their capacity are not taxable under the Reverse Charge Mechanism.
- Clarification on the taxation of food and beverages in cinema halls.
- Recommendations from the Group of Ministers (GoM) on casinos, race courses, and online gaming:
- Recommendation to tax online gaming and horse racing at a uniform rate of 28%.
- Inclusion of online gaming and horse racing in the taxable actionable claims under the CGST Act.
- Taxation is based on the face value of chips, bets placed with bookmakers/totalisators, and bets placed in online gaming.
- Measures for streamlining GST compliances:
- Requirement of e-way bill generation for the intra-state movement of gold and precious stones.
- Special procedure for tobacco manufacturers, pan masala, etc., for registration and GST return filing.
- Penalty for non-registration of machines by manufacturers.
- Amendments to provisions regarding IGST refund route and GST registration requirements.
- Various other amendments related to GST compliance, biometric-based Aadhaar authentication, recovery of tax and interest, suspension and revocation of GST registration, and more.
- Measures for trade facilitation:
- Rules governing the appointment and conditions of the proposed GST Appellate Tribunals (GSTATs).
- Continuation of relaxations for Form GSTR-9 and 9C for FY 2022-23.
- Exemption from filing GSTR-9/9A for small taxpayers.
- Clarifications on the Input Services Distributor (ISD) mechanism, warranty replacement of parts, refund-related issues, TCS liability, and invoicing requirements for certain supplies.
Additionally, due dates for filing GST returns were extended for taxpayers in Manipur until August 31, 2023.
These are the key updates from the 50th GST Council meeting held on July 11, 2023.
Expectations from the 50th GST Council Meeting
- New rule for excess ITC claims: Businesses may have to provide reasons for excess Input Tax Credit (ITC) claims or deposit the excess amount into the ledger. The threshold difference triggering intimation could be set at 20% and over Rs.25 lakh.
- Establishment of GST Appellate Tribunals (GSTATs): GSTATs are expected to be set up to streamline and expedite indirect tax litigations, providing a common forum for dispute resolution between the Centre and states.
- GST on Casinos, Online Gaming, and Horse Racing: The meeting may address the taxation issues related to online gaming, casinos, and horse racing, including determining the base value for applying the tax rate.
- Amendments to the GST Law for e-Invoicing: The Council may discuss amendments to the GST law regarding the new e-invoicing timelines and reporting requirements.
- Automation of GST Return Scrutiny and Taxpayer Base Expansion: The Finance Minister has directed the CBIC to automate GST return scrutiny and enhance the use of technology to increase the taxpayer base. This may be discussed in the meeting.
- E-Way Bill Rules for Gold and Precious Metals: There may be discussions on generating e-way bills for transporting gold and precious metals worth Rs.2 lakh or more within the state, with varying thresholds set by state governments.
- TCS in Transactions Involving Multiple E-commerce Operators: The GST Council may clarify the liability of TCS (Tax Collected at Source) in transactions involving multiple e-commerce operators.
Other expectations include determining rates for millet goods and cancer medicine and correcting the inverted tax structure in the textile sector. The application of GST compensation cess on Multi-Utility Vehicles (MUV) and the GST rate on food and beverages at multiplexes may also be clarified. Additionally, discussions on pan masala production monitoring, hill states’ budgetary support, and GST procedural changes are anticipated.
Please note that these are expectations and not confirmed outcomes of the meeting.
