Reetu | Jul 10, 2023 |
Expectations from 50th GST Council Meeting; Know Details
The members of the 50th GST Council will meet in New Delhi on July 11 to review the group of ministers’ report on online gaming, casinos, and horse racing, as well as to ratify the GST Appellate Tribunal guidelines.
In the meeting, the ministers will propose altering the revenue-sharing arrangement, according to one of the council members who spoke on the condition of anonymity. Unless the council decides differently, GST income is split 50:50 between the central and the states.
The deputy chief minister of Chhattisgarh had previously written to the central, requesting that the revenue sharing model be revised to benefit states in the ratio of 80:20 or 70:30, since producing states with natural resources are disadvantaged under the existing revenue sharing model.
States are still unable to match their prior levels of development, and some revenue relief should be explored for state benefit, according to the previously stated council member.
The issue of revenue owing to states was also addressed at the most recent GST council meeting in February, when it was declared that 23 states will get Rs 16,982 crore in GST compensation for the month of June 2022.
Additionally, a sum of Rs.16,524 crore was released to Delhi, Karnataka, Odisha, Puducherry, Telangana, and Tamil Nadu, which provided the revenue figures as certified by the Accountant General of the states. However, not all states have submitted AG certificates leaving pending dues to be settled.
The last meeting, which followed the presentation of the Union Budget 2023, voted to establish GST Appellate Tribunals, as well as decrease rates on pencil sharpeners and liquid jaggery, among other things, while also voting against capacity-based taxes on tobacco and tobacco products.
Matter to Discussed in Upcoming Meeting
Despite the fact that the council approved in February to establish the GST appellate tribunal, the legal redressal mechanism is still in the works.
While the centre’s CGST legislation have been amended, states are yet to implement the necessary legal changes, according to CBIC chairman Vivek Johri on the sidelines of the GST day festivities.
The CBIC is trying to impose stronger guidelines to reduce the effect of fraudulent registrations and ITC claims, which will be addressed by council members.
As of July 4th, the agency has validated 58,178 registrations, of which 28%, or 16,989, were deemed ‘non-existent.’ Special secretary and GST member Shashank Priya informed the reporters at the Assocham GST summit that 11,015 registrations had been suspended and 4,972 registrations had been revoked.
The CBIC is trying to impose stronger guidelines to reduce the effect of fraudulent registrations and ITC claims, which will be addressed by council members.
The financial implications of the results were Rs.15,035 crore.
Members of the council are due to debate the tax levy suggestions for internet gaming, casinos, and horse racing. While the convener presented the second report on the subject in December 2022, the item has yet to be put to a vote due to a lack of unanimity even among GoM members.
The GoM on rate rationalisation requires a new convener following the change in leadership in Karnataka as a consequence of the 2023 assembly election results. The GoM has yet to issue its final report.
Krishna Byre Gowda, the revenue minister of the newly elected administration, will represent Karnataka at the 50th GST Council.
Minister Chandrima Bhattacharya succeeded West Bengal’s former finance minister Amit Mitra as a member of the GoM.
Tarkishore Prasad, former Deputy Chief Minister of Bihar, is also a GoM member who no longer has a cabinet post in the Bihar state government. Council members from Goa, Kerala, Rajasthan, and Uttar Pradesh also serve on the GoM.
According to a report, the council is expected to define the definition of multi-utility vehicles and crossover-utility vehicles for the tax imposition of 22% compensatory cess over and above the 28% GST rate.
A similar clarification on the definition of SUVs was provided during the 48th council meeting in December 2022.
Many multiplexes, like restaurants, collect an 18% tax on food and drinks supplied in cinema rooms. There is an argument, however, that food and beverages might be considered composite supplies and taxed accordingly, in addition to the tax paid on the main item of movie tickets. The state of Karnataka has requested clarification from the Council on this topic.
The fitment committee, comprised of tax authorities from the centre and states, has recommended that the tax on cancer drug Dinutuximab imported by persons for personal use be waived. Currently, the item is subject to a 12% integrated GST.
According to a report, the suggestion includes IGST exemption on medications and food for particular medical purposes used in the treatment of uncommon diseases that are imported for personal use.
ISRO, Antrix Corporation Ltd, and New Space India Ltd are free from GST, which is otherwise imposed at 18% for commercial businesses. To promote increased involvement from private firms, the fitment committee has recommended exempting satellite launch services from the tax levy, according to sources.
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