What GST Council Discussed And Approved--Key Highlights
The 47th meeting of the GST Council accepted recommendations on exemptions and correction of inversion and e-way bills for intra-state movement of precious metals and stones, Finance Minister Nirmala Sitharaman told reporters after the two-day meet on Wednesday.
E-way bills for gold have been allowed for a minimum amount of Rs 2 lakh, Revenue Secretary Tarun Bajaj said.
States gave inputs on extension of GST compensation, said Sitharaman. "A few states said they would like compensation cess to continue for some time." No decision was, however, taken.
Sitharaman said "horse racing, online gaming, casino--all three are essentially gambling". The council, however, have decided to hear representatives of casinos, horse riding and online games again.
The council didn't discuss GST on virtual digital assets, Sitharaman said. It, however, approved setting up a GST Tribunal for dispute resolution.
Several Decisions Taken On MSME-E Commerce Issue: Tarun Bajaj
Revenue Secretary Tarun Bajaj says several decisions taken on MSME-e-commerce issue.
The council has decided whatever is applicable for offline businesses will be applicable to online ones. "We expect it will be implemented from January 1, 2023," he said.
E-Way Bills Allowed For Gold Worth Rs 2 Lakh And Above
E-way bills for intra-state movement of gold has been allowed for a minimum amount of Rs 2 lakh, Revenue Secretary Tarun Bajaj said.
Vehicle details will not be disclosed for security reasons. States will decided what details need to be disclosed on the e-way bills, he said.
No Discussion On GST On Virtual Digital Assets
No discussion took place on GST on virtual digital assets, Sitharaman said. The council discussed GST Tribunal and a group of ministers will be set up on the matter.
By end of this month, GoM will submit report and the matter will be taken up in the next council meet, she said.
Revenue-Neutral Rate Breached: Sitharaman
Revenue neutral rate, as per the RBI study, has been breached to the disadvantage of the system, the finance minister said.
It came down from 15.5% to 11.8% and has hit some sectors and this requires a correction, Sitharaman said.
So rate rationalisation, as and when it happens, if it results in an increase in tax buoyancy, will also correct inefficiencies borne by someone in the value chain, she said.
Decisions On GoM On IT Reforms
Giving details of decisions on GoM on IT reforms, Revenue Secretary Tarun Bajaj said the suggestions include further improvements in the use of GSTN and AI/ML so that "we have better data for better compliance".
There are also issues regarding fake invoice bills, he said. The GoM have made recommendations on six aspects.
The GoM on IT reforms is permanent and will keep offering suggestions to GSTN through the GST Council.
GST Council To Decide How To Use Excess Compensation Cess: Sitharaman
Any cess collected, in excess of the borrowing, will belong to the GST Council. The council will decide what to do with the excess as and when it happens.
A Few States Want Compensation Cess To Continue: Sitharaman
States have given their inputs on extension of GST compensation, said Sitharaman. "A few states said they would like compensation cess to continue for some time."
A few other states said they also need to stand on their own, she added. "We went to discuss this for an hour after lunch."
On extension of compensation period, the states have made their representations and can only report this much at this point, she said.
16-17 states spoke on this issue, said Revenue Secretary Tarun Bajaj. Some states expressed they need to wean themselves away from compensation, he said.
GoM Suggestions On Exemptions, Inverted Duty Structure Accepted: Nirmala Sitharaman
The GoM's recommendations on exemptions and correction of inversion have been accepted, said Nirmala Sitharaman.
Horse Racing, Online Gaming, Casinos Are Gambling, Says Sitharaman
"Horse racing, online gaming, casino--all three are essentially gambling, committee pointed out," she said. "There may be an element of skill or chance in it but essentially all three are gambling." Even by the existing rules, they are treated so and uniformly taxed at 28%, she added.
States To Decide Details Of Vehicles Carrying Precious Metals: Sitharaman
There was a discussion about movement of gold, and whether the number and Aadhaar of the transporter will be disclosed, said Sitharaman
"Based on the recommendations, it will be left to the state to decide what details they will take of the vehicles carrying precious metal. We've gone by the report submitted by Kerala," she said.
Goa Minister Asked For Casinos To Be Treated Differently: Nirmala Sitharaman
Conrad Sangma, chair of this GoM, will once more hear Goa.
Some of the members of the GoM felt that if there is a window for casinos to be heard again, then let horse riding and online games be heard again too, said Sitharaman.
"We have allowed that. The GST Council will meet on this GoM agenda either on Aug. 1/first week of August," she said.
GST Council Took Up All Agendas And One Additional Item, Says Nirmala Sitharaman
The 47th GST Council meeting concluded having finished all the agenda on the table, and one additional item, said Finance Minister Nirmala Sitharaman while addressing the media after the two-day meet.
The highlights of this meeting were discussions on four GoM reports on:
Exemptions, correction of inverted duty structure.
On rate rationalisation, extension has been granted.
Betting, online gaming, casinos, horse racing, lottery
IT, technology-related matters
Movement of precious metals, particularly gold.
Watch Finance Minister Nirmala Sitharaman Addresses Media
Will Be Right To Extend Compensation Period To States, Says Tamil Nadu Finance Minister
Uttarakhand To Pitch For Compensation Cess Extension
Uttarakhand Finance Minister Premchand Aggarwal told BQ Prime that he remains keen to pitch for an extension of compensation cess on the second day of the GST Council’s meeting in Chandigarh.
He said the state is facing an annual revenue loss of Rs 5,000 crore and that he is hopeful of an extension of compensation or any form of monetary support from the the union government.
Aggarwal will also meet the Finance Minister Nirmala Sitharaman separately.
Here's What Happened On Day 1
The Goods and Services Tax Council, on the first day of its 47th meeting on Tuesday, approved the recommendations of the group of ministers on gold, system reforms and the interim report on rate rationalisation, according to three people with the knowledge of the matter state.
There was also consensus on the review of items for correction of inverted duty structure and the law committee’s recommendation for setting up a new GST tribunal for settlement disputes.
The council is expected to deliberate on GoM suggestions for casinos, race horsing and online gaming, along with GST compensation, on Wednesday.
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