50th GST Council Meeting: Read Major Decision That Has Been Taken

The 50th meeting of the Goods and Services Tax (GST) Council, led by Finance Minister Nirmala Sitharaman, concluded. Notable attendees included MoS (F) Pankaj Chaudhary, Revenue Secretary Sanjay Malhotra, Chairman CBIC Vivek Johri, Member GST, and Member Tax Policy, CBIC, among others. The GST council announced that a circular would be issued to provide clarification regarding the Tax Collected at Source (TCS) liability under Section 52 of the CGST Act, 2017, in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction of supplying goods or services. Read More Business News on our website.

50th GST Council Meeting Major Highlights

During the meeting, the GST rates were reduced to 5% for four items. Additionally, GST exemptions were granted for various imported pharmaceutical products. However, the imposition of a 28% tax on the entire value of online gaming was a major development, potentially impacting Indian online gamers. Revenue Secretary Sanjay Malhotra also addressed concerns regarding the interference of the Enforcement Directorate (ED) in the Goods and Services Tax Network (GSTN). The council further exempted cancer-related drugs, medicines for rare diseases, and food products for special medical purposes from GST.

The council approved a reduction in GST rates for four items. These include: 

1. Uncooked, unfried, and extruded snack palettes, which will now be subject to a 5% GST rate instead of 18%

2.Fish soluble paste, with a reduced GST rate of 5% from the previous 18%

3. LD slag, which will now have a 5% GST rate, aligning it with blast furnace slag, compared to the earlier rate of 18%
4. Imitation zari thread, which has been reduced from 12% to 5% GST.

Furthermore, the GST council reduced the tax on food served in cinema halls from 18% to 5%. The council clarified that the supply of food and beverages in cinema halls would be taxable as a restaurant service as long as they are provided as part of a service and independently of the cinema exhibition service. In cases where the sale of cinema tickets and the supply of food and beverages are bundled together as a composite supply, the entire supply will attract GST at the rate applicable to the exhibition of cinema, which is considered the principal supply.

The GST council has also decided to eliminate the distinction between games of skill and games of chance for online gaming. A 28% GST rate has been imposed on the full value of online gaming, casinos, and horse racing. The tax will be applicable to the face value of chips purchased in casinos, the full value of bets placed with bookmakers/totalisators in horse racing, and the full value of bets placed in online gaming. These changes will come into effect following an amendment in the GST law.

Regarding the Enforcement Directorate gathering information on the GST Network, Revenue Secretary Sanjay Malhotra clarified that the recent finance ministry notification only empowers tax authorities with more information. The GSTN serves as a recipient of information and does not provide any information to the ED through this notification. Malhotra also stated that the Director of the Financial Intelligence Unit (FIU) will provide information to empower authorities in cases where there is a potential for tax evasion or money laundering.

On the occasion of the 50th GST council meeting, Finance Minister Nirmala Sitharaman released a short film titled ‘GST Council – 50 steps towards a journey.’ Additionally, she unveiled a Special Cover and customized myStamp. 

The council made the decision to amend entry 52B in the compensation cess notification, encompassing all utility vehicles meeting specific criteria such as length exceeding 4000 mm, engine capacity exceeding 1500 cc, and a ground clearance of 170 mm or above. They clarified that ‘ground clearance’ refers to the measurement in an unladen condition.

 In order to facilitate the smooth establishment and operation of the GST Appellate Tribunal, the council recommended rules governing the appointment and conditions of the President and Members of the proposed tribunal. Furthermore, the council suggested that the provisions of the Finance Act, 2023, related to the GST Appellate Tribunal, should be notified by the Central government from 1 August 2023.

 The relaxations granted in the financial year 2021-22 concerning various tables of FORM GSTR-9 and FORM GSTR-9C will be extended for the financial year 2022-23, as per the council’s recommendation. Moreover, the exemption from filing an annual return (in FORM GSTR-9/9A) for taxpayers with an aggregate annual turnover of up to two crore rupees will also continue for the financial year 2022-23, aimed at reducing the compliance burden on smaller taxpayers.