The 53rd GST Council meeting is started today at 22 June 2024, chaired by Union Finance Minister Nirmala Sitharaman. This highly anticipated meeting is expected to cover a packed agenda with significant potential announcements that could impact various sectors. Stakeholders are eagerly awaiting the outcomes as the council deliberates on a range of topics.
Key Topics on the Agenda
- Inclusion of Natural Gas and ATF under GST: One of the major proposals is to bring natural gas and aviation turbine fuel (ATF) under the ambit of GST. This move could simplify the tax structure and potentially reduce the cost burden on industries reliant on these fuels.
- Review of 28% Levy on Online Gaming, Horse Racing, and Casinos: The council will revisit the 28% GST levy on the proceeds from online gaming, horse racing, and casinos. This decision was initially imposed in October 2023, and the industry has been advocating for relief from this high tax rate.
- GST on Fertiliser Firms: The Standing Committee on Chemicals and Fertilisers has recommended reducing GST on raw materials and nutrients to support farmers and the fertiliser industry. These recommendations, made in February, are expected to be deliberated upon in today’s meeting.
- Restructuring of Rates: The council may address the inverted duty structure in the pharma and textile sectors. There is a call for restructuring these rates to stimulate consumption and provide relief to businesses. Additionally, reductions in GST rates for other sectors might be considered to boost economic activity.
- Inclusion of Fuel Prices under GST: While the inclusion of petrol and diesel under GST has been a longstanding demand, achieving consensus among all states remains a significant hurdle. The council might discuss this issue, although immediate inclusion appears unlikely.
- Introduction of GSTR-1A: The new GST return form, GSTR-1A, is expected to be introduced to allow taxpayers to amend or add records within the same month after filing GSTR-1 and before filing GSTR-3B. This change aims to streamline compliance and ensure accurate reporting.
- Compliance and Reporting Enhancements: The council might also discuss measures to enhance compliance and reporting, particularly focusing on the e-commerce and digital transaction sectors. New rules or clarifications could be introduced to improve tax compliance within these rapidly growing industries.
Other Agenda
1. Dual Jurisdiction Relief:
- Aim: Eliminate overlapping jurisdiction between Central GST and State GST to reduce legal and administrative burdens.
2. Improvement in Notice Issuance:
- Aim: Develop a unified software system for issuing GST notices to streamline processes and enhance data security.
3. Litigation Control:
- Aim: Introduce measures to reduce GST-related lawsuits by ensuring impartial appellate officers and considering an amnesty scheme.
4. Streamlining ITC Provisions:
- Aim: Ensure tax officers first attempt to collect unpaid taxes from sellers before penalizing buyers.
5. Reconsidering Blocked ITC:
- Aim: Review and potentially allow input tax credit in industries like hospitality and infrastructure to prevent cascading tax effects.
6. Clarification on RCM ITC:
- Aim: Issue clear guidelines on the availability of input tax credit for reverse charge mechanism payments.
7. Reasonable Penalty Limits:
- Aim: Amend Section 73 of the GST Act to ensure penalties do not exceed the actual tax payable.
8. Exceptional Registration Cancellation:
- Aim: Restrict GST registration cancellations to exceptional cases.
9. Addressing GST Delays:
- Aim: Recognize and address the adverse impact of delayed GST Council meetings on taxpayers.
10. Focus on Practical ITC Rules:
- Aim: Ensure input tax credit rules are practical and fair, minimizing undue penalties.
Additional Suggestions and Requests
The council will also consider various suggestions from industry bodies, including:
- Reduction of pre-deposit amounts for appeals.
- Modifications in the filing of appeals related to the detention and seizure of goods.
- Capping the number of show-cause notices generated through artificial intelligence tools.
- Clarifications on Input Tax Credit (ITC) eligibility and other procedural simplifications.
Conclusion
Today’s 53rd GST Council meeting is a pivotal event with the potential to introduce significant changes to the GST framework. Businesses and taxpayers should stay informed about the outcomes, as these decisions could have immediate and far-reaching impacts. Stay tuned for live updates and detailed analysis of the announcements made during this crucial meeting.
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