Next GST Council meet uncertain amid pending Election Dates announcement

With the schedule for the General Election 2024 expected to be revealed soon, the GST Council‘s next meeting is uncertain. The Government has yet to announce the date of the next Council meeting. The last meeting (52nd) took place on October 7, 2023.

According to the GST Council’s Procedure and Conduct of Business Regulations, “The Council shall meet at least once in every quarter of the financial year.”

Furthermore, notification of the meeting must be issued at least seven days before the Council’s meeting date. Agenda notes for the meeting under notice must be sent at least three days before the date of the meeting. There is a special provision that allows the Secretary, with the consent of the Chairperson, to summon an emergency meeting of the Council with two days’ notice.

The Election Commission’s Model Code of Conduct (MCC) prevents the political party in power from making a policy choice that could influence voters, either directly or indirectly. However, in extraordinary cases, a policy decision can only be made and announced after it has been reviewed by the Commission. Also, ongoing development efforts will be unaffected. The MCC takes effect on the date of the poll announcement and expires when the Election Commission releases a notification of the next house’s constitution.

Now, the real question is whether the Council meeting can go place once the MCC is in place. Since the Council’s constitution in 2016, there has only been one General Election. MCC began operations on March 10 of that year, and the 34th GST Council meeting was held on March 19. However, the meeting discussed the operational details for implementing the council’s recommendations from its 33rd meeting (February 20 and 24, 2019) for a lower effective GST rate of 1% in the case of affordable houses and 5% on the construction of houses other than affordable houses. There was no major decision made during the meeting.

As of now, there is one major issue before the GST Council: on August 2, 2023, Finance Minister Nirmala Sitharaman announced a 28 percent GST on full face value for online money gaming, casinos, and horse racing, stating that the recommendation would be reviewed six months after implementation, on October 1. The six-month period ends March 30.

Experts have differing opinions on the delay in calling a Council meeting. According to one tax expert, this is not the first time the meeting has been postponed for more than a quarter.

“Ignoring the delay in decisions/clarifications waiting at the Council’s end, there are no legal consequences for not following the processes. The frequency of meetings was higher in the early years, but now that the GST law is more or less settled, the frequency appears to be decreasing,” he said.

According to another tax expert, GST is a business tax that must evolve over time, which is why the GST Council meets every few months.

“While time has passed, the officers of The GST Law Committee continue to meet and keep the wheels of GST turning. We may see another round of big bang policy changes at the next meeting,” he said.