Here's What To Expect From The 50th GST Council Meeting

The members of the 50th GST Council will meet on July 11 in New Delhi to discuss the group of ministers' report on online gaming, casinos, and horse racing, and also finalise the rules of the GST Appellate Tribunal.

The ministers would suggest revising the revenue-sharing model in the meeting, one of the council members told BQ Prime on the condition of anonymity. GST revenue is shared between the centre and states in a ratio of 50:50 unless decided otherwise by the council.

Chhattisgarh deputy chief minister T S Deo had earlier written to the centre to revise the revenue sharing model to states' benefit in the ratio of 80:20 or 70:30, as producing states with natural resources are disadvantaged in the current revenue sharing model.

States are still unable to match their previous level of growth, and some revenue relief should be considered for states' benefit, the council member mentioned earlier said.

The subject of revenues owed to states was also dealt with in the last GST council meeting in February when it was announced that 23 states will get Rs 16,982 crore pertaining to GST compensation for the month of June 2022.

Additionally, a sum of Rs 16,524 crore was released to Delhi, Karnataka, Odisha, Puducherry, Telangana, and Tamil Nadu, which provided the revenue figures as certified by the Accountant General of the states. However, not all states have submitted AG certificates leaving pending dues to be settled.

The last meeting, which followed the presentation of the 2023 Union Budget, voted to establish the GST Appellate Tribunals, and cut rates on pencil sharpeners and liquid jaggery, among others, while also ruling against capacity-based taxation on tobacco and tobacco products.

1) Report on levy of 28% tax on Online Gaming, Casinos and Horse Racing

The council members are expected to discuss the tax levy recommendations on online gaming, casinos and horse racing. While the second report on the matter was submitted by the convener in December 2022, the matter is yet to be put to vote as a lack of consensus exists even among the members of the GoM.

2) Implementation of the GST Appellate tribunals

Though the council voted to establish the GST appellate tribunal in its February meeting, the implementation of the legal redressal system is still a work in progress.

While amendments have been made to the centre's CGST laws, states are yet to put in place the requisite legal amendments, CBIC chairman Vivek Johri told BQ Prime on the sidelines of the GST day celebrations.

3) Tighter norms to curb fake registrations

The CBIC is looking to implement stricter guidelines to curb the impact of fake registrations and fradulent ITC claims, which is expected to be discussed by council members.

As of July 4th, the department verified 58,178 registrations of which 28% amounting to 16,989 have been identified as ‘non-existent.’ 11,015 registrations have been suspended and 4,972 registrations have been cancelled, special secretary and GST member Shashank Priya told media at the Assocham GST conclave

The financial implication of the findings amounts to Rs 15,035 crore, he had said.

4) Reconstitution of GoM on Rate rationalisation may be on the cards

The GoM on rate rationalisation needs a new convener after the change in leadership in Karnataka following the 2023 assembly election result. A final report by the GoM is still awaited.

Krishna Byre Gowda, the revenue minister from the newly elected government will take Karnataka's place in the 50th GST Council.

Of the original members of the GoM, Minister Chandrima Bhattacharya replaced former finance minister Amit Mitra from West Bengal.

GoM Member and Bihar's former Deputy Chief Minister Tarkishore Prasad's place also remains a question as he no longer serves a cabinet position in the Bihar state government. Other members of the GoM include council members from Goa, Kerala, Rajasthan and Uttar Pradesh.

4) Fitment committee recommends tax exemption on cancer drug

The fitment committee comprising of tax officials from the centre and states has recommended that the levy on cancer medicine Dinutuximab, imported by individuals for personal use be exempted from tax. Currently the item attracts a 12% integrated GST.

The recommendation extends to cover IGST exemption on medicines and food for special medical purposes used in the treatment of rare diseases which are imported for personal use, according to a PTI report.

5) Clarifications on the taxability of MUVs

The council is likely to clarify on the definition of multi-utility vehicles and crossover-utility vehicles for the tax levy of 22% compensation cess over and above the 28% GST rate, according to the sam PTI report.

A similar clarification was issued on the definition of SUVs in the 48th council meeting in December 2022.

6) Tax Applicability on food or beverages served in cinema halls

Many multiplexes charge 18% tax on food and beverages served at cinema halls like the tax levy on restaurant services. However there is an arguement that food and beverages can be considered composite supply and taxed accordingly, along with the tax paid on the principal item of movie tickets. The matter has been raised by the state of Karnataka for clarity from the Council.

7) Tax Emeption on Satellite Launch Services For Private Players

Public sector enterprises like ISRO, Antrix Corporation Ltd and New Space India Ltd are exempt from GST, which is otherwise fixed at 18% for private players. To encourage greater participation from private entities, the fitment committee has reccomended to exempt the tax levy on satellite launch services, PTI reported.