The 53rd Goods and Services Tax (GST) Council meeting is set to take place on Saturday, chaired by Union Finance Minister Nirmala Sitharaman. This meeting marks the first since the formation of the NDA government and follows a gap of eight months, the last meeting being held on October 7, 2023. All state finance ministers are expected to attend. While the official agenda hasn’t been announced yet, the meeting is anticipated to address several key issues within the GST regime, including tax rates, policy modifications, and administrative challenges.
The GST, introduced on July 1, 2017, has been a cornerstone of the Indian tax system. This upcoming meeting is particularly significant given the recent pre-Union budget discussions held by Sitharaman with state and Union territory finance ministers.
Here are some key areas where the GST Council’s deliberations are expected to focus:
Fertilizers:
The current GST rate on fertilizers stands at 5%, while raw materials like Sulphuric Acid and Ammonia are taxed at 18%. The council may examine recommendations from the Standing Committee on Chemicals and Fertilizers regarding potential GST reductions on nutrients and raw materials.
Online Gaming:
The current GST structure levies a 28% tax on the full value of bets placed by online gaming companies. The GST Council is likely to review this existing rate, potentially leading to changes in the tax structure for this rapidly growing sector.
Telecom:
The meeting may address an issue concerning GST payments by telecom companies, specifically the installments they pay towards spectrum charges.
Extra Neutral Alcohol (ENA):
In the October 2023 meeting, the GST Council decided to relinquish its power to tax ENA (the raw material used to produce alcohol for human consumption) to the states. This upcoming meeting will likely involve vetting the necessary amendments to the GST law to reflect this decision.
Corporate Guarantees:
The council might revisit its decision to impose an 18% GST on guarantees provided by corporates to their subsidiaries. The CBIC circular on corporate guarantees was subject to a stay order by the Punjab and Haryana High Court, making this a point of contention.
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