Highlights of the 50th Goods and Service Tax (GST) Council Meeting, Held on 11th July 2023.
Introduction
On 11th July 2023, the 50th GST Council Meeting took place at Vigyan Bhawan, New Delhi, under the guidance of Union Finance Minister Nirmala Sitharaman. Attended by ministers representing states and union territories, the meeting centered around crucial taxation matters, such as exemptions for specific drugs, redefining utility vehicles, taxation regulations for goods sold in theaters, and stricter guidelines for GST registration and input tax credit claims.
Key Highlights of the 50th GST Council Meeting
- Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28% on full face value, Suitable amendments to be made in the GST law to include online gaming and horse racing in Schedule Ill as taxable actionable claims.
- Notification of GST Appellate Tribunal by the Centre with effect from 01.08.2023: Rules governing appointment and conditions of President and Members of the proposed GST Appellate Tribunal to be released.
- Exemption of cancer-related drugs, medicines for rare diseases and food products for special medical.
- purposes from GST Bringing down GST rates % on certain items and regularise GST during the past period on “as is basis”.
- Amend the entry 528 in compensation cess notification to expand the meaning of utility vehicles On pan masala, tobacco products etc, where it is not legally required to declare the retail sale price.
- the earlier ad valorem rate as was applicable on 31st March 2023 may be notified for levy Compensation Cess of To clarify that supply of food and beverages in cinema halls is taxable as restaurant service on.
- meeting certain conditions.
- To clarify that services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company or body corporate are not taxable under RCM.
- GTAs will not be required to file declaration for paying GST under forward charge every year.
- Relaxations and exemptions concerning Annual Returns pronded in FY 2021-22 to be continued for FY 2022-23 To clarify the place of supply in respect of supply of goods to unregistered persons
- To clarity that ISD mechanism is not mandatory for distribution of input tax credit of common input services However, amendment to be made in GST law to make 150 mechanism mandatory prospectively.
- To provide clarity on various issues involving warranty replacement of parts and repair services.
- during warranty period without any consideration.
- A mechanism for system-based intimation to the taxpayers in respect of the excess avallment of TCS .
- FORM GSTR-38 vis a vis that made available in FORM GSTR-28 above a certain threshold.
Other Noteworthy Discussions of the 50th GST Council Meeting:
Reorganization of GoM: The GST Council deliberated on the reorganization of the group of ministers (GoM) responsible for rate rationalization. This move was necessitated by the vacancy created after the new government in Karnataka assumed office.
TCS Liability in E-commerce: The council addressed the issue of Tax Collected at Source (TCS) liability for suppliers engaged in e-commerce trading through the government’s Open Network for Digital Commerce (ONDC). Clarity was sought regarding the TCS obligations of such suppliers.
Concerns Over PMLA Inclusion: Finance ministers from various states, including Delhi, Punjab, Tamil Nadu, West Bengal, Himachal Pradesh, Karnataka, Chhattisgarh, and Rajasthan, expressed concerns regarding the decision to bring GST under the purview of the Prevention of Money Laundering Act (PMLA). This decision grants the Enforcement Directorate the authority to inspect small businesses for potential GST violations.
Symbolic Representations: The 50th GST Council Meeting witnessed symbolic representations of the journey of Goods and Services Tax. A short video film titled “GST Council – 50 steps towards a journey” was unveiled, showcasing the progress made. Furthermore, the postal department released a special cover and customized ‘My Stamp’ to commemorate this significant occasion.
The 50th GST Council Meeting addressed a range of important topics, including rate rationalization, TCS liability in e-commerce, concerns over PMLA inclusion, and celebrated the milestones achieved in the GST journey through symbolic representations.