The last GST Council Meeting was held in December 2022. The upcoming 49th GST Council Meeting was announced by the GST Council itself on Twitter. The meeting was rescheduled due to the busy schedule of the stakeholders involved in the meeting. Such meetings are the heart and soul of the country, as it forms the future road map for the country. Ideally, the items, which could not be part of the discussion by the Council in its last meeting, would top the schema of the meeting on February 18, 2023. We present our expectations in the upcoming council meeting.
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Establishment of the tribunal
GST is still a new regime for all. The laws are vague and are subject to different interpretations. This leads to numerous disputes before the court. As and when the stakeholder clarifies any interpretation of the law, the defaulters are sent show cause notices. This has increased the number of cases before the courts. In order to introduce a robust judicial mechanism, the council is expected to discuss the establishment of a tribunal for the indirect tax regime.
The principal bench is expected to be established in New Delhi, headed by the president and technical members of the Centre and state. Such GSTAT would be expected to hear orders as opposed to orders passed by the Appellate Authority or Revisional Authority. The principal bench would address the appeals against the Appellate or Revisional Authorities if the case would be with respect to the Place of Supply. At the oust, such a constitution of the tribunal would accelerate the redressal of the cases under IDT.
Gaming companies
Ever since Gameskraft, gaming company, was slapped with a massive tax notice (over INR 20,000 crores), the same taxation has been the talk of the town. The same was slightly touched upon in the Budget 2023-24. However, the GoM might have addressed this taxation w.r.t. online gaming, casinos, and horses. Council is expected to take up this matter for deliberation and decision.
The GoM had agreed on a 28% GST on such business practices. However, due to the absence of an accord on whether the tax should be levied on only the fees charged by the portal or the entire consideration, including the bet amount, received from participants, the GoM had decided to refer all suggestions to the GST Council for a final decision. Many notices are being issued to hundreds of online gaming sites in India. To arrest the litigation on this front, the GST council must come up with precise guidelines.
GST on tobacco and Pan masala
GST on tobacco and pan masala are at 28%, including compensation cess. Tobacco and pan masala attract a cess of 290% and 135%, respectively. The government plans to scrutinize these industries and change the levy method thoroughly. As per the officials, tax evasion in this industry is common and steep. In order to curb tax evasion by pan masala and gutkha industries, the GST council had appointed a ministerial panel which had come up with the idea of imposing capacity-based taxation with a requirement of greater disclosure. Policy-level changes are expected to be announced in the GST council meeting.
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Affordable housing
Since the 2017 budget, India has been focusing on developing infrastructure, affordable housing, and roads. In the recent meeting held after the budget announcement, the Hon’ble Finance Minister was requested to reduce the GST rate on the cement industry, which is currently pegged at 28%.. Fitment Committee will is looking into this matter. Every year there is an increase in home buyers in our country. Any tax reduction would bring down the overall cost of the construction and spur growth. This will add enough imputes to the growth in the number of buyers.
Conclusion
In the Budget of Amrit Kaal, 2023-24, the government focused on adopting the Lapher curve, where the tax rates are reduced to an extent to attract non-taxpayers to pay taxes. In order to bring this into action, the tax rates under customs were considerably lowered. The same is expected under GST in the upcoming council meeting. The government has fastened its seat to catch hold of the tax evaders and expand the taxpayers’ base to generate revenue. It is also believed that in the upcoming council meeting, all the decisions will be in favor of the country’s citizens with the mere motive of “Sabka sath, sabka vikas”.
